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УДК: 334.78.631.11 (477)

DOI: https://doi.org/10.36887/2415-8453-2021-3-39

Oleksandr DERKACH
applicant of Kharkiv Petro Vasylenko National Technical University of Agriculture

JEL classification: М14

Abstract

The article examines social investment as an indicator of social responsibility of agribusiness entities. It was found that social investments have a much longer payback period and low profitability compared to investments in other projects, but they expect and expect to also receive a social effect, which is a priority over other expected effects in the process of investing socio-economic activities of agrarian business. It is noted that this socio-economic effect is expressed in gaining consumer loyalty to agricultural products, forming a positive image in terms of high product quality, high level of service, environmentally friendly technologies, environmental protection, strengthening confidence in brands and brands. It is established that due to the socially oriented activities of the agribusiness entity, a favorable social environment is created, which will eventually lead to a stable competitive position in domestic and global markets. By choosing socially responsible behavior, the agribusiness entity feels a significant advantage in the market compared to other producers: expanding marketing niches, promoting goods or services, winning new customers, and strengthening relationships with partners, attracting new investors and more. The importance of the socio-economic component of investment is emphasized, as the social measures generate additional income by increasing sales and increasing the competitiveness of agricultural businesses. Social investments in the agricultural sector are implemented in the form of social programs and projects. Today, agricultural businesses are implementing social programs, in most cases, to create favorable conditions for the development of labor, which reduces social risks, especially in depressed areas and local oppressed areas. Socially responsible agribusiness entities define social development programs as a tool to reduce the asymmetry between financial interests and social development requirements, balancing the balance between fulfilling the business’s objective function of increasing market value and increasing competitiveness, and solving socio-economic problems.

Keywords: social responsibility, social investments, agrarian business entities, socio-economic component of investments.

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The article was received 18.07.2021

Quote article, APA style

Oleksandr D. 18.07.2021. Social investments as an indicator of assessment of agricultural business entities’ social responsibility. Ukrainian Journal of Applied Economics and Technology. 2021. №3. 288-294 pp. https://doi.org/10.36887/2415-8453-2021-3-39

Quote article, MLA style

Oleksandr D. Social investments as an indicator of assessment of agricultural business entities’ social responsibility. Ukrainian Journal of Applied Economics and Technology. 18.07.2021. https://doi.org/10.36887/2415-8453-2021-3-39