You are here
Financial stability as a determinant of the competitiveness of agricultural enterprises.
This study examines financial stability as a key determinant of the competitiveness of agricultural enterprises operating in the highly volatile and risk- prone environment of the Ukrainian agrarian sector. The research highlights that financial stability is not limited to maintaining solvency or meeting short-term financial obligations but serves as a strategic foundation for long-term development, investment capacity, innovation adoption, and resilience to external shocks, particularly those caused by the ongoing war in Ukraine. Theoretical approaches to defining financial stability and its interrelations with profitability, liquidity, capital structure, and innovative activity are analyzed to provide a comprehensive conceptual framework.
Using empirical data for 2021 and 2024, the study presents a comparative assessment of liquidity indicators, profitability ratios, financial stability coefficients, and working capital sufficiency across four types of financial stability in agricultural enterprises of the Kharkiv region. The results demonstrate a significant decline in most indicators after the on- set of the full-scale invasion, driven by disruptions in logistics, destruction of production assets, reduced cash flows, and limited access to external financing. Enterprises with strong financial stability show considerably better performance, particularly in liquidity, capital adequacy, and the ability to cover obligations with operating revenues. Conversely, enterprises with a crisis-type financial position face high insolvency risks, reduced operational efficiency, and an urgent need for financial restructuring.
Factor analysis confirms a strong interdependence among most financial indicators, except for return on assets, which appears more sensitive to external economic conditions and managerial factors. The findings reveal that enhancing financial stability requires a comprehensive approach focused on capital structure optimization, improved efficiency in managing current assets, diversification of financing sources, and the implementation of modern risk-management tools. Government financial support plays a significant stabilizing role by mitigating losses and fostering the investment potential of the sector. Ultimately, financial stability serves as the cornerstone for building sustainable competitive advantages, ensuring that agricultural enterprises retain their capacity to adapt, recover, and expand even under adverse external conditions.
Key words: financial stability, competitiveness, agricultural enterprises, innovation investments, government support, liquidity.
https://orcid.org/0000-0002-0815-267X1. Demydenko, L. & Nakonechna, Yu. (2023). Fіnansova stіjkіst' agrarnogo sektoru Ukraїni v umovah
voєnnogo stanu [Financial stability of the agricultural sector of Ukraine under martial law]. Visnyk of Taras Shevchenko National University of Kyiv. Economics, 1(222), pp. 51–59. Available at: https://doi.org/10.17721/1728-2667.2023/222-1/6
2. Badem, M., & Hurma, H. (2025). Evaluation of the Profitability and Competitiveness of Strategic Products with the Policy Analysis Matrix: The Case of Tekirdağ, Türkiye. Sustainability, 17(11), 5112. Available at: https://doi.org/10.3390/su17115112
3. Okhota, Yu. V. & Chikov, I. A. (2024). Competitiveness of agricultural enterprises: factors of increasing based on innovative determinants. Actual Issues of Modern Science. European Scientific e-Journal, 32, 22-37. Ostrava: Tuculart Edition, European Institute for Innovation Development. DOI: https://doi.org/10.47451/ecn2024-07-02
4. Petryshyn, N., Zaiets, I., Martyniuk, T. & Oryshchyn, N. (2025). Fіnansova stіjkіst' ukraїns'kih agropіdpriєmstv: analіz dohodіv, pributkovostі ta rinkovoї kapіtalіzacії [Financial stability of Ukrainian agricultural enterprises: analysis of revenues, profitability and market capitalization]. Ekonomika. Finansy. Pravo, 2, pp. 77-80. Available at: https://doi.org/10.37634/efp.2025.2.17
5. Hloušková, Z., Lekešová, M., Hlaváčová, M. & Pánková, L. (2020) ‘Multicriteria assessment of Czech farms’, Agricultural Economics. Czech, 66(3), pp. 101-111. Available at: https://doi.org/10.17221/193/2019-AGRICECON
6. Hloušková, Z. & Lekešová, M. (2020) ‘Farm outcomes based on cluster analysis of compound farm evaluation’, Agricultural Economics – Czech/66(10), pp. 435-443. Available at: https://doi.org/10.17221/273/2020-AGRICECON.
7. Szafraniec-Siluta, E., Strzelecka, A., Ardan, R., & Zawadzka, D. (2024). Determinants of Financial Security of European Union Farms-A Factor Analysis Model Approach. Agriculture, 14(1), 119. Available at: https://doi.org/10.3390/agriculture 14010119
8. Humeniuk, M., Nemish, D., Balaniuk, I. & Shelenko, D. (2021). Pіdvishhennja efektivnostі funkcіonuvannja malogo agrarnogo pіdpriєmnictva [Improving the efficiency of small agricultural entrepreneurship]. Visnyk agrarnoi nauky, 9(822), pp. 80–88. Available at: https://doi.org/10.31073/agrovisnyk202109-11
9. Petryshyn, N., Zaiets, I., Martyniuk, T. & Oryshchyn, N. (2025). Fіnansova stіjkіst' ukraїns'kih agropіdpriєmstv: analіz dohodіv, pributkovostі ta rinkovoї kapіtalіzacії [Financial stability of Ukrainian agricultural enterprises: analysis of revenues, profitability and market capitalization]. Ekonomika. Finansy. Pravo, 2, pp. 77–80. Available at: https://doi.org/10.37634/efp.2025.2.17
10. Dolgosheya, N. (2013). Value of agrarian enterprises financial sustainability for innovative activity realization. Economic Annals-XXI, 1-2(1), 30-33. Available at: https://ea21journal.world/index.php/eav125-08/
11. Wang, D., Li, M., Kong, R. et al. The impact of financial resilience on farmers’ entrepreneurial decision-making. Humanit Soc Sci Commun 12, 1637 (2025). Available at: https://doi.org/10.1057/s41599-025-05895-5
12. Cunha, Nascimento. (2025). Exploring the Interplay between Innovation Investment and Financial Sustainability in European Agricultural Companies. Research on World Agricultural Economy. 364-378. Available at: https://doi.org/10.36956/rwae.v6i2.1705.
13. Ivashkiv, I., Kupalova, H., Goncharenko, N., Andrusiv, U., Streimikis, J., Lyashenko, O., Yakubiv, V., Lyzun, M., Lishchynskyi, I. and Saukh, I. (2020). Environmental responsibility as a prerequisite for sustainable development of agricultural enterprises. Management Science Letters, 10: 2973–2984. DOI: http://dx.doi.org/10.5267/j.msl.2020.5.028.
14. Allahverdiyev, E., Rao, X. & Trujillo-Barrera, A. Farm liquidity and business risk from the risk balancing perspective: evidence from selected U.S. states. J Econ Finan 49, 710–732 (2025). Availableat: https://doi.org/10.1007/s12197-025-09722-0
15. Polukhin, A. A., & Panarina, V. I. (2022). Financial Risk Management for Sustainable Agricultural Development Based on Corporate Social Responsibility in the Interests of Food Security. Risks, 10(1), 17. Available at: https://doi.org/10.3390/risks10010017
16. Bereznicka Joanna, 2018. Subsidies for operational activities and the financial stability of farms in European Union countries, Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IR WiR PAN), Institute of Rural and Agricultural Development, vol. 180(3), September. Available at: https://doi.org/10.22004/ag.econ.344530
17. Kucher A. Financial support for the sustainable competitiveness of land use: trends and opportunities. Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development. 2022. Vol. 22. Issue 1. P. 359-366.
18. Kurdyś-Kujawska, A., Soliwoda, M., Grzelczak, M., & Apanel, A. (2025). Financial Innovation in Building Agricultural Sector Resilience: New Horizons and Challenges for Blended Finance in Poland. Agriculture, 15(7), 754. Available at: https://doi.org/10.3390/agriculture15070754
19. Khurshid, N., Sharif, H., Tabash, M.I. & El‑Refae, G.A. (2024) ‘An assessment of asymmetric impact of financial stability and agricultural subsidies on agricultural production in Pakistan’, Journal of Agribusiness in Developing and Emerging Economies, ahead-of-print. DOI: https://doi.org/10.1108/JADEE-10-2023-0248.
20. Bobitan, N., Dumitrescu, D., & Burca, V. (2023). Agriculture’s Efficiency in the Context of Sustainable Agriculture-A Benchmarking Analysis of Financial Performance with Data Envelopment Analysis and Malmquist Index. Sustainability, 15(16), 12169. Available at: https://doi.org/10.3390/su151612169
21. Shyian, D. V. & Strochenko, N. I. (2003). Fіnansovij analіz [Financial Analysis]. Kyiv: ASK Publishing House, 240 p.
| Attachment | Size |
|---|---|
 ekon_2_2025_9_112-121.pdf | 577.31 KB |