Correlation and regression analysis of investment attractiveness of AIC

Abstract

Introduction. At the modern stage, strategically important task for Ukraine’s economy is to develop its agro-industrial complex. The agricultural sector has to become a driving force for economic recovery, improvement of the efficiency of investment and innovation, economic and social activities of our country.

Purpose. The aim of the article is to identify the major factors that affect the volume of capital investments in agriculture. It should be done with the help of  correlation analysis. It is also necessary to highlight the negative and positive factors of impact on investment appeal of Ukraine’s agro-industrial complex and verify significance of the chosen impact factors by means of regression analysis.

Method (methodology). In this article we have used the correlation and regression analysis, linear regression.

Results. Correlation analysis has been carried out. In the first case it has been applied between amount of agriculture capital investment and macroeconomic criteria, namely: inflation indices, NBU discount rate and exchange rate. The gained correlation coefficients are rather low, being in the range from 0.31 to 0.39. One can state that the given macroeconomic indicators do not have close connection with capital investment amount. In the second case it has been calculated the impact of volume of export, products profitability, sell price index, agricultural production amount index and GDP of the agricultural sector on amount of capital investment.

The obtained correlation coefficients are in the range from 0.2 to 0.82. GDP of the sector has the biggest impact, its correlation coefficient being 0. 82. Correlation coefficient of products profitability is 0. 5, correlation coefficient of export amount is 0.69. So, it is possible to state that intra-sector factors have the biggest effect on capital investment in agriculture. The following empiric equation of simple linear regression was obtained, where dependent variable is amount of capital investment in agriculture, independent factor is GDP of agro-industrial complex. The generated model has the following equation: Capital investment amount = 0.08* GDP of agro-industrial complex – 387,792. Amount of capital investment in agro-industrial complex will grow, if this sector is profitable and advanced.