The influence of globalization processes on the innovative development of the food industry of Ukraine in the phases of business cycles

  • A. Balian -
  • M. Sychevsky -
  • O. Kovalenko -
  • L. Yashchenko -
  • S. Verbytskyi -
Keywords: globalization, food industry, cyclicality, business cycles, innovative development

Abstract

Aim. One of the important problems in the development of the food industry in Ukraine is the infl uence of globalization processes, accompanied by cyclical development of the economy. The cycles are manifested in periodic ups and downs of the business climate, taking into account the infl uence of various factors (climate change, risks in agricultural production, legislative changes, etc.), i.e. when the economy seeks to fi nd equilibrium. Therefore, the identifi cation of fl uctuations in economic activity and, accordingly, changes in market conditions that arise as a reaction to the action of well-defi ned, predictable factors of the market environment are relevant and necessary. The purpose of the article is to reveal the infl uence of globalization processes and economic cyclicality on the innovative development of the food industry in Ukraine, to identify the phases of business cycles, to determine the criteria for the effective functioning of individual food industry sectors during periods of crisis and depression in order to develop effective tools for leveling and smoothing their consequences at different levels of management. Methods. Based on the application of classical and modern methods for assessing economic cycles, we developed a methodological approach to justifying the phases of the business cycle and identifying the development specifi cities of individual sectors of the food industry of Ukraine (meat processing, milk processing, baking, sugar production) in these phases. In the authors’ algorithm, at the appropriate stages of the study, the following methods were applied: factor analysis  to calculate the indicator of the business climate; smoothing time series  to identify individual phases of the business cycle; average values of growth rates  to summarize the characteristics of the phases of the business cycle and identify the characteristics of the development of food industry sectors of Ukraine in these phases. The primary data for the calculations were the data of global and national statistics. Results. It has been established that the consequences of the impact of globalization on the development of the food industry of Ukraine since the beginning of the new millennium are: changes in the industrial structure; its formation under the infl uence of an external market, where raw materials and primary processing products are most in demand; accelerated growth in consumer prices for food products, which does not correlate with real incomes of the population; expanding the monopolization of food markets; the imbalance of supply and demand, which leads to differences in the development of economic phenomena, in particular  in the innovative development of the food industry, etc. The study showed that the development of individual sectors of the food industry is affected by the cyclical development of the national economy. The periods of the business cycle phases for the Ukrainian economy (from 2002 to mid-2019) and their impact on the activity of the food industry are determined. It was established that during this period the Ukrainian economy went through 4 business cycles with fi ve major downturns and peaks in economic activity. It was revealed that a sign of its development is the presence of separate business cycles in which there is no depression phase. Conclusions. The assessment of the intensity of the development of the food industry sectors during the phases of business cycles gives grounds for the justifi cation of their slower innovative development. The main reasons for this phenomenon in the food industry are as follows: imbalance in supply and demand for goods; low purchasing power of the population; investing signifi cant amounts of fi nances in increasing production volumes, and not in innovative development, ineffi cient pricing policy. The methodological approach proposed in the article, based on the identifi ed signs of the phases of the business cycle, makes it possible to justify the problem periods of the food industry in the short term, as current problems signifi cantly affect the implementation of long-term plans. This confi rms the feasibility of applying the proposed methodological approach in further research.
Published
2019-12-15
How to Cite
BalianA., SychevskyM., KovalenkoO., YashchenkoL., & VerbytskyiS. (2019). The influence of globalization processes on the innovative development of the food industry of Ukraine in the phases of business cycles. Agricultural Science and Practice, 6(3), 63-76. https://doi.org/10.15407/agrisp6.03.063