Consolidation of the capital and its implication for the development of vertically integrated companies in Ukraine

Svitlana Hryhorieva
Postgraduate student, Institute of Market Problems and Economic & Ecological Research National Academy of Sciences of Ukraine, E-mail:grygorieva_alina@mail.ru

Cite this article:

Hryhorieva, S. (2016), Consolidation of the capital and its implication for the development of vertically integrated companies in Ukraine. Ed.: M. Zveryakov (ed.-in-ch.) and others [Konsolidatsiia kapitalu ta yii znachennia dlia rozvytku vertykalno-intehrovanykh kompanii Ukrainy; za red.: М. I. Zveriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 2 (61), pp. 34–39.

Abstract

The article substantiates the necessity to strengthen the key role in the economic development of Ukraine's large corporate sector. Links established between the corporate enterprises vertically, that are subordinated to the achievement of the final result of the activities of many small and medium-sized companies, are the backbone of the economy. Due to such relations, interdisciplinary exchange of capital is facilitated. It is proposed to continue the development of vertically integrated companies in the Ukraine through the consolidation of capital companies in various industries. This will reduce the transaction costs associated with the cross-sectoral interaction of economic agents; reduce organizational risks associated with the interaction of these entities; minimize the chance of turning them into monopolies.

Keywords

capital consolidation; vertical integration; the consolidation effect; vertically-integrated companies; institutional forms; competition; state; inter-sectoral potential; transaction costs.

JEL classification: A100; E220; E320; E690;  DOI: https://doi.org/10.33987/vsed.2(61).2016.34-39

UD classification: 338.23

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