Energy independence and financial stability of economic entities in the conditions of war

Nataliia Melnychuk, Rostyslav Dubas and Olga Palokha

Ekonomika, Journal for Economic Theory and Practice and Social Issues, 2022, vol. 29, issue 5

Abstract: Russia’s invasion of Ukraine has caused many social, economic, environmental and energy problems. Most business entities faced problems at the national level that affected their financial and economic activities. The mass departure of workers abroad, rising natural gas prices, internal relocation, and constant shelling force business entities to search for new approaches to the management and development of their enterprises. The purpose of the study – substantiate and test the scientific and methodological approach to achieving energy independence of economic entities as a way to avoid their insolvency in times of war. In the course of the study, a critical analysis of the thematic literature was performed, and a set of general scientific and special research methods was used: expert assessments, observation, analogy, grouping, obtaining a consensus, deductive, inductive reasoning, systematisation, system-functional, measurement, analysis, comparison, logical generalisation, systematisation, hypothesis, a repeated combination of independent scenarios, extrapolation, elasticity estimation and graphical. The study identified the consequences of the military invasion of Ukraine and developed an algorithm for actions during the war. Four scenarios have been identified, under which the investigated business entity can solve the urgent problems. It is substantiated that the best scenario is the one in which it is required to increase its production capacity by setting up a “full cycle” production using a continuous pyrolysis system for the recycling of worn-out tires. The rationality of its use is proved. The scientific and methodological tools for interaction between business entities and the state during the war have been improved based on a systematic approach, which, unlike the existing ones, deepens the significance of shifting the centre of gravity from the macro to the micro level and is based on the proposed algorithm of actions (identifying the problem, developing possible scenarios for its immediate solution, compliance of the chosen scenario with the national interests of the state, finding a source of funding for the implementation of one of the scenarios), which determines the most optimistic scenario of the balance of interests between the state and business entities. The practical value of the proposed lies in the identification of economic, social, environmental and energy efficiency of the developed algorithm of actions in practice, on the example of financial and economic activities of the entity. Such an approach, on the one hand, allows for achieving energy independence soon and is a way to avoid the insolvency of economic entities in the conditions of war. On the other hand, it should become a reliable base for the national economy in the period of post-war reconstruction

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2022
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