Abstract:

Nowadays, the main target of economic and investment policies of local authorities is to ensure the increase of their own financial resources in order to strengthen the financial capacity to meet the needs of the maximum administrative units and to attract investment in its development. The modern economic crisis has essentially affected financial possibilities of the majority of regions Ukraine. In these conditions for working out regional economic policy and increasing its realization efficiency, special attention should be given to the analysis of processes of formation and estimation of financial potential of the region opening financial resources of economic entities, factors and conditions of their involving, and also risks and threats arising in the course of use. The main purpose of the article is to study the definition of “financial capacity” and develop a model for the region’s financial capacity building based on its assessment. The article deals with the nature, content, and approaches to the interpretation of economic category “financial potential of the region,” the importance of financial potential for sustainable economic growth in the region is proved. It is determined that not all financial resources created in the region are used in its territory and, conversely, a part of the financial resources generated in other regions of the country is used here to meet the needs of the region. Results. This article reflects the present approach of ideas of the financial potential of a region, singles out its basic elements such as tax, investment, budgetary, and credit potential. The existing methods of the formation of the estimation of the regional potential are presented and basic problems of their estimation are formulated. The implementation stages are presented and the elements of the mechanism of the financial potential management of regional development are described. Practical implications. The basic directions of this mechanism implementation to ensure social and economic regional development are proposed. Value/originality. The suggested model can be used by local authorities in determining the actual financial capacity of a region and will also make it possible to evaluate financial capacity under declining subsidies from budgets of other levels.

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