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About the Mechanism of Ensuring Balance for Attracting Investments for Construction Corporations

Author

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  • Boris Kasaev
  • Azat Razakov

Abstract

The article studies the significant reasons for the lack of balance of the investment support for innovations for construction corporations. Based on a comparison of investment and innovation projects for construction companies, the article notes that an innovative project differs from an investment project with the presence of elevated levels of risk and uncertainty. Some examples show that the estimated financial forecasts turn out to be inaccurate within the course of implementing innovative and investment projects. The main reasons for significant departures from the necessary capital investments realms and the terms of implementing innovative and investment projects beyond common squandering of money are, in fact, arisen from incorrect presentation of works amount, the necessary costs and terms for fulfilling the project, their deliberate understatement for alleviation of investments availability, unfounded changes in the process of the project design performance, inflation faulty assessment, and the underestimation of expenses due to absence of major marketing researches. It is proved that the basic conditions for the effectiveness of projects is the availability of transparent investment mechanism. Another matter of critical importance is the investment mechanism presented with complex of organizational structures, regulatory documents, technologies, human resources, methods, instruments and other necessary means applied for attraction of capital aimed at realization of innovative and investment projects. It is obvious that all the miscalculations linked to the realization of innovative and investment project refer to the low level of preparation and working out of investment mechanism. In the meantime, many factors defining the ability of companies to attract investments are out of possibility of their control. In this context the companies have to perform the organizational activity on design of the affairs they would have overall control over and, subsequently, to influence the sponsors’ decisions to invest their capital.

Suggested Citation

  • Boris Kasaev & Azat Razakov, 2015. "About the Mechanism of Ensuring Balance for Attracting Investments for Construction Corporations," Modern Applied Science, Canadian Center of Science and Education, vol. 9(5), pages 219-219, May.
  • Handle: RePEc:ibn:masjnl:v:9:y:2015:i:5:p:219
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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