FINANCIAL PROVISION OF QUALITY: STATE FINANCING OF INNOVATIONS VS. DIRECT FOREIGN INVESTMENTS

Abstract

The purpose of this paper is to form a new approach to provision of quality of entrepreneurship's products, which is based on financial management and the idea of company's large interest in increasing product quality for the formation of sustainable, long-term, and unique competitive advantages in the target market, which cannot be achieved by means of marketing or prices. This approach is oriented at a progressive society, in which living standards are differentiated but allow consumers to accept higher price due to higher product quality, and marketing effects are limited due to higher level of awareness and responsibility of consumers. Originality of this work is due to the following advantages as compared to the competing studies. Firstly, the structure of quality is specified: the commercial and non-commercial components are distinguished. The indicators of official statistics with which the both components of quality could be measured quantitatively are determined. Secondly, the level of socio-economic development of countries and its influence on preference for financing and the created positive effects for product quality in entrepreneurship are determined. Thirdly, the differences are determined and the preference for sources of financial provision of quality in entrepreneurship is substantiates - state financing of innovations and direct foreign investments. Fourthly, the methodological recommendations on financial management of product quality in entrepreneurship depending on consumers' priorities are offered.

Keywords

• quality
• financial provision
• state financing of innovations
• direct foreign investments
• developed countries
• developing countries
• underdeveloped countries
• quality management