THE ROLE OF INSTITUTIONAL DETERMINANTS IN OVERCOMING THE TENDENCY OF DEINDUSTRIALIZATION OF THE NATIONAL ECONOMY
Abstract
The purpose of the research is the detection of institutional determinants and substantiation of their decisive role in the course of industry modernization that is the essential condition for national economic growth. The study relies on the logic and historical method to reveal the peculiarities of best practices of the world countries with different level of development; statistical analysis method to determine the trends of economic and institutional performance changes; methods of comparison and generalization etc. Summarizing the research, it was proved that Ukrainian manufacturing sector made still insignificant contribution, oppositely its sensitivity to economic crises caused significant imbalances in economy. However, these are state organizations and political institutions that considerably affect the revitalization of upgrading processes in industrial sector through market failure mitigation. The study found that the lack of strategic vision and long-term industrial development planning was the main institutional obstacle for activation of economic development of Ukraine. To overcome the trend of deindustrialization it was proposed to provide effective institutional interrelations between the state and stakeholders, namely to develop institutional mechanisms of modernization, which will eventually contribute to: diversification of the industrial structure of the economy towards increasing the share of medium and high-tech processing industries and raising the complexity of products; improvement of relations between research centers and enterprises, especially regarding innovation activities, commercialization of existing scientific developments; imports of scarce cutting-edge technologies.
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