Page 69 - Theoretical and Practical Interpretation of Investment Attractiveness

opportunities for the development of economic efficiency. In this context, regions, according
to neoclassical theory, serve as a factor to ensure a stable balance, providing conditions for
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the development of economic efficiency (land, labor, capital, entrepreneurial ability) .
The concept of regional potential includes the capabilities of the region's constituent
elements. It consists of natural-resource, material, scientific-technical, institutional, and
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human capacities .
From these ideas, it can be emphasized that scholars pay fundamental attention to the
overall economic efficiency of regions, ensuring their economic sustainability, and consider
it necessary to view the economic system in its entirety in terms of quantity and quality in
order to assess economic efficiency. Some economists suggest studying economic system
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efficiency in five ways, emphasizing its stratified nature :
1. The production capacity of the economic system. This includes considering various
ratios of economic resources involved in production, such as labor and material resources, in
relation to the Cobb-Douglas production function. This approach evaluates the total value of
goods and services produced in an optimal manner, considering the maximum utilization of
resources available for production and creation.
If we consider the result of economic efficiency, it is evaluated based on the total value
of all material and labor resources consumed and the productivity ratio between the total value
of these resources and the resulting output.
2. The resources consumed or used in the production of specific goods and services
(output) for a specific purpose. This is also a quantitative indicator, which involves using
various combinations of production resources in order to minimize the quantity and cost of
resources used to produce a particular value.
If we approach this in a different way, it is necessary to use production resources in
such a way that the volume of goods and services expected to be created is maximized.
Evaluating social benefits in terms of money (assessing economic activity objectively
involves risks).
3. As a result of the functioning of the economic system, important outcomes that have
significant social importance and are of material value are obtained (assessing their
importance and interrelationships involves risks).
4. Complex or integral evaluation involves assessing the development of separately
obtained indicators through elasticity coefficients, the overall resource efficiency of the region,
the competitiveness factors of the region (Appendix 4), overall production that aligns with
the region's investment attractiveness, and other interrelated mesoeconomic indicators.
Integral assessment of economic efficiency can be carried out using several methods
(Table 2.1.1).

90 Shlychkov V.V. Economic mechanisms for managing resource potential // Bulletin of Economics, Law, and Sociology.
No. 2. 2007.
91 Balatsky O.F. Theoretical problems of assessing the economic potential of a region, company, enterprise // Bulletin of
Sumy State University.
Economics. 2004. No. 9 (68). P. 84-95.
92 Biyakov O.A. Theory of economic space: methodological and regional aspects. – Tomsk. Publishing house of Tomsk
State University, 2004. 152 p.
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