Formation Ukraine's Business Environment in Times of Military Turmoil

Abstract

The research is dedicated to the peculiarities of shaping the business climate in Ukraine under martial law conditions. The study explores the essence of the business climate and compares it with the country's investment climate. It establishes the relationships between external and internal factors that influence the formation of business entities' entrepreneurial potential. The leading macroeconomic indicators, whose dynamics represent understanding the state of economic development, its investment attractiveness, profitability, and risk level, have been examined. It is determined that the dynamics of GDP indicators expressed in different currencies provide varied interpretations of this indicator. Therefore, to accurately reflect the relationship between the level of investment attractiveness and GDP growth rates, it is necessary to consider inflationary processes and the pace of national currency depreciation. Over the last ten years, Ukraine's international ranking in ease of starting a business has steadily increased. However, the political-military situation in 2022 caused a sharp decline in the ease of doing business index. It is worth noting that the index recovered in 2023, indicating positive business processes in Ukraine's economy. A regional study of entrepreneurship development during 2022–2023 identified the regions with the highest business start-up activity, highlighting small and medium-sized enterprises' key challenges, possible solutions, and trends in restoring their operations. Additionally, a sectoral analysis of the profitability dynamics of Ukrainian enterprises for 2021–2023 was carried out. The most promising sectors for investment and the ways to address the problems hindering the business climate improvement in their locations were identified.