Journal of Applied Economic Research
ISSN 2712-7435
Formation of the Investment Portfolio in Accordance with the Criteria of Circular Economy
Belik I.S., Starodubets N.V., Ivlev S.G., Zverev S.O.
Abstract
The paper is devoted to the question of investment portfolio formation in accordance with the criteria of a circular economy. The aim of the paper is to analyze the potential of the circular economy in developing practical recommendations for justifying the effectiveness of investment projects carried out using modern technologies. To achieve this goal, the authors reviewed the main concepts that formed the theoretical basis of the circular economy (Zero Waste, Cradle-to-Cradle, Performance economy, Industrial ecology). The definition of a circular economy, its principles, the main industrial processes based on the criteria of a circular economy (maintenance, product reuse, product refurbishment and/or component recovery, recycling of waste and end products) are discussed. An original methodical approach is proposed, allowing one to form an investment program of an industrial enterprise using both traditional indicators of economic efficiency (total net present value, internal rate of return, discounted payback period) and additional indicators based on the criteria of a circular economy. Using this approach, a rating assessment was made of two alternative investment projects for the management of waste from a mining and processing enterprise, and recommendations were proposed for their inclusion in the investment portfolio of the enterprise. The assessment showed that the ranking of investment projects, taking into account alternative indicators based on the criteria of the circular economy, is more objective since it relies not only on the criteria of the economic efficiency of the projects, but also on the implications of their implementation for the environment. The results can be used by engineers, economists, heads of enterprises and local decision-makers in the formation of the investment portfolio of an enterprise/region in accordance with the criteria of a circular economy.
Keywords
investment project; circular economy; resource saving; waste management; mining enterprises; best available technologies; cash flows; net discounted costs; rating evaluation of investment projects.
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About Authors
Belik Irina Stepanovna – Doctor of Economics, Professor, Department of Economic Security of Industrial Complexes, Ural Federal University named after the first President of Russia B.N. Yeltsin, Ekaterinburg, Russia (620002, Ekaterinburg, Mira street, 19); e-mail: irinabelik2010@mail.ru.
Starodubets Natalia Vladimirovna – Candidate of Economic Sciences, Associate Professor, Department of Economic Security of Industrial Complexes, Ural Federal University named after the first President of Russia B.N. Yeltsin, Ekaterinburg, Russia (620002, Ekaterinburg, Mira street, 19); e-mail: n.v.starodubets@gmail.com.
Ivlev Sergey Gennadievich – Master Student, UMMC Technical University, Verkhnyaya Pyshma, Russia (624091, Sverdlovsk Region, Verkhnyaya Pyshma, Uspensky Avenue, 3); e-mail: irinabelik2010@mail.ru.
Zverev Stanislav Olegovich – Master Student, Ural Federal University named after the first President of Russia B.N. Yeltsin, Ekaterinburg, Russia (620002, Ekaterinburg, Mira street, 19); e-mail: st-zverev@yandex.ru.
For citation
Belik I.S., Starodubets N.V., Ivlev S.G., Zverev S.O. Formation of the Investment Portfolio in Accordance with the Criteria of Circular Economy. Bulletin of Ural Federal University. Series Economics and Management, 2018, Vol. 17, No. 6, 986–1004. DOI: 10.15826/vestnik.2018.17.6.044.
Article info
Received September 24, 2018; Accepted October 22, 2018.
DOI: http://dx.doi.org/10.15826/vestnik.2018.17.6.044
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