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June 2017 (published: 30.06.2017)
Number 2(29)
Home > Issue > Business risk and financial market volatility: analysis of the Relationship
Poltoratskaiy Т.B.
The article deals with the actual problem of the development of entrepreneurship within the framework of the integration space of the Eurasian Economic Community. The purpose of the study is to analyze the prospects for the development of financial architecture in three alternative scenarios. We consider one of the most important elements of financial architecture - the volatility of the financial market. This parameter of the business environment differently promotes the spread of different types of business. In conditions of high volatility, big money is earned on short-term trading and financial transactions. With a low level of volatility and risk, the real sector of small and medium businesses is developing. Probabilistic statistical methods are used as research methods. Based on the data on lending to small and medium-sized businesses, the volatility of lending rates is estimated. The estimation is made by means of the coefficient of variation, calculated as the ratio of the standard deviation to the mathematical expectation. This method excludes the influence of the dimension factor. The intersection of the impact of the volatility risks of the financial market and the attitude to risk on the part of entrepreneurs of small and medium business is examined. As a result of the research, the following conclusions were obtained: a high level of volatility in the whole of the European Economic Area will contribute to the development of the financial and speculative business for all the countries joining the union. Different volatility indicators for the national financial markets will help to concentrate this business in countries with high volatility. A low level of volatility contributes to the development of the real sector of the economy. Achieving a low level of volatility of the financial market throughout the EEA will lead to this goal. The article is devoted to some aspects of the impact of global Finance on business and the possible reaction of business to this effect. The study is based on probabilistic-statistical analysis of volatility of financial market instruments. The volatility of financial market instruments has a significant impact on almost all subjects of the national market, and today it is difficult to ignore this fact, including the development of small and medium-sized businesses. Research tools are the concepts and meanings that are deeply rooted in contemporary scientific discourse about the finances: "financial architecture" and "volatility". Stochastic volatility analysis made on the basis of the author's clarification of the method of its assessment. The complexity and inconsistency of the impact of the global financial market manifested in the fact that it itself has become a significant business, surpassing the income of a business in the real sector. How to use the instability of modern financial situation of the space for economic integration to realize the objectives of the entrepreneurs have a different attitude to risk, doing business in the financial sector and the real sector of small and medium business, is considered in this article.
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Keywords: probabilistic-statistical analysis, financial architecture, volatility, risk, credit rate, integration space, small and medium-sized businesses.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
UDC 338.242
Business risk and financial market volatility: analysis of the Relationship
The article deals with the actual problem of the development of entrepreneurship within the framework of the integration space of the Eurasian Economic Community. The purpose of the study is to analyze the prospects for the development of financial architecture in three alternative scenarios. We consider one of the most important elements of financial architecture - the volatility of the financial market. This parameter of the business environment differently promotes the spread of different types of business. In conditions of high volatility, big money is earned on short-term trading and financial transactions. With a low level of volatility and risk, the real sector of small and medium businesses is developing. Probabilistic statistical methods are used as research methods. Based on the data on lending to small and medium-sized businesses, the volatility of lending rates is estimated. The estimation is made by means of the coefficient of variation, calculated as the ratio of the standard deviation to the mathematical expectation. This method excludes the influence of the dimension factor. The intersection of the impact of the volatility risks of the financial market and the attitude to risk on the part of entrepreneurs of small and medium business is examined. As a result of the research, the following conclusions were obtained: a high level of volatility in the whole of the European Economic Area will contribute to the development of the financial and speculative business for all the countries joining the union. Different volatility indicators for the national financial markets will help to concentrate this business in countries with high volatility. A low level of volatility contributes to the development of the real sector of the economy. Achieving a low level of volatility of the financial market throughout the EEA will lead to this goal. The article is devoted to some aspects of the impact of global Finance on business and the possible reaction of business to this effect. The study is based on probabilistic-statistical analysis of volatility of financial market instruments. The volatility of financial market instruments has a significant impact on almost all subjects of the national market, and today it is difficult to ignore this fact, including the development of small and medium-sized businesses. Research tools are the concepts and meanings that are deeply rooted in contemporary scientific discourse about the finances: "financial architecture" and "volatility". Stochastic volatility analysis made on the basis of the author's clarification of the method of its assessment. The complexity and inconsistency of the impact of the global financial market manifested in the fact that it itself has become a significant business, surpassing the income of a business in the real sector. How to use the instability of modern financial situation of the space for economic integration to realize the objectives of the entrepreneurs have a different attitude to risk, doing business in the financial sector and the real sector of small and medium business, is considered in this article.
Read the full article
Keywords: probabilistic-statistical analysis, financial architecture, volatility, risk, credit rate, integration space, small and medium-sized businesses.
DOI 10.17586/2310-1172-2017-10-2-18-28