Actual problems of innovative economy and law

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Impact of relocation of enterprises on the social and economic welfare of the regions of Ukraine

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УДК: 338.4

DOI: https://doi.org/10.36887/2524-0455-2024-6-14

Plahotniuk Volodymyr,
PhD student of the Department of Economics, Entrepreneurship, and Business Analytics,
State Tax University (Irpіn, Ukraine),
https://orcid.org/0000-0002-8555-0698

The article examines the impact of enterprise relocation on the socio-economic well-being of Ukrainian regions in the context of war. Enterprise relocation, as an emergency measure to move businesses from unsafe territories to safer regions, has become one of the key tools for maintaining economic activity, preserving jobs, and sustaining local budget revenues. The study identifies the main reasons for relocation, including preserving production capacity, supporting the economy, paying taxes, and ensuring employment continuity. The study identifies key factors influencing the success of relocation efforts, including logistical accessibility, availability of skilled personnel, local government support programs, and alignment of business activities with regional development strategies. Emphasis is placed on the long-term potential of relocation to contribute to the regional economy by diversifying industries and fostering innovation, provided businesses receive sufficient support to adapt and recover. The article also examines the role of relocation in addressing regional economic disparities, noting the benefits of concentrating businesses in less developed areas, such as western Ukraine. Specific examples, including the formation of an IT cluster in Zakarpattia and industrial relocations to Lviv and Chernivtsi, demonstrate how targeted policies and local initiatives can maximize the economic benefits of relocation. The analysis further highlights significant challenges related to the relocation process, including logistical barriers, workforce shortages, and delays in reestablishing production capacity. These challenges are exacerbated by the uncertain duration and progression of the war, making it difficult for enterprises to make long-term strategic decisions. The article underscores the importance of a comprehensive approach to enterprise relocation as a means of ensuring regional economic resilience and addressing the broader challenges posed by the war. By integrating relocated businesses into regional economies and aligning their activities with local development strategies, Ukraine can leverage enterprise relocation as a tool for long-term sustainable development, even in the face of significant external challenges.

Keywords: enterprise relocation, socio-economic development, regional economy, entrepreneurship, internally displaced persons, logistics, regional policy, decentralization.

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The article was received 15.11.2024

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Plahotniuk Volodymyr. 15.11.2024. Impact of relocation of enterprises on the social and economic welfare of the regions of Ukraine. The journal "Actual problems of innovative economy and law". 2024 / #6. 71-76pp. https://doi.org/10.36887/2524-0455-2024-6-14

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Plahotniuk Volodymyr. "Impact of relocation of enterprises on the social and economic welfare of the regions of Ukraine". The journal "Actual problems of innovative economy and law". 15.11.2024. https://doi.org/10.36887/2524-0455-2024-6-14

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