UNDERSTANDING THE ROLE AND IMPLICATIONS OF INVESTMENTS IN THE FRAMEWORK OF INDUSTRIAL ENTERPRISE ECONOMIC SECURITY

Abstract

The paper seeks to explore the concepts of investment and investment activity from the position of ensuring the enterprise economic security along with revealing the nature of external and internal environment factors affecting investment implementation, which makes impossible to calculate the forecast accuracy of performance outcomes, the resources of which are the assets considered within the investment concept. It is argued that since it seems impossible to predict the outcomes from investments with exact accuracy, there is always a certain degree of risk which you should consider while making investment decisions. However, in the framework of the investment concept it is suggested to divide risk into two components: the risk of losing your initial assets which are viewed as the resources for certain activities, and the risk which is directly related to the activities associated with the above assets utilization as a resource. The interpretation of the investment concept is suggested given the riskiness of the investment process, i. e. the understanding that the benefits from investments occur only when there is a risk. In this context, investments are considered as allocation of tangible and intangible assets into objects of economic, social, environmental and other activities subject to their riskiness, and thereby gaining respective benefits. The paper also provides insights on the range of investment sources as well as particular risks associated with their use. It is emphasized that from the perspective of ensuring economic security, the priority should be given to company internal financing, however, in many cases, self-financing capacity is insufficient to cover the company needs, thus reducing its economic security. It is reasoned that under the lack of internal funding it is recommended to use external sources of investment, however subject to ensuring the proper level of economic security. The findings reveal that investments have become an integral part of effective company performance and the key factor to enhance its economic security.