THE PRESENT STATUS OF MARKET INSTITUTIONS AS A FACTOR IN UKRAINE’S NATIONAL SECURITY AND COMPETITIVENESS
THE PRESENT STATUS OF MARKET INSTITUTIONS AS A FACTOR IN UKRAINE’S NATIONAL SECURITY AND COMPETITIVENESS

Summary/Abstract: Purpose: This study explores the impact of market institutions on Ukraine’s national securityand competitiveness. Specifically, it presents the role of the stock market and banking sectorin shaping economic stability and defense capabilities.Methodology/approach: Drawing on insights from institutional economics, this researchemploys a comparative analysis of market institutions in Ukraine and other Central and East-ern European (CEE) countries. The study is based on data from the stock market and bank-ing sector to assess their performance and implications for national security. Additionally, theAxelrod tournament framework is applied to analyze strategic behavior within these institu-tions. This analysis incorporates the utilization of various Python packages to delve into thecomplexities of the situation. The market of arms manufacturers is selected as an illustrationof missed opportunities. Optimization of portfolios was carried out based on the maximiza-tion of the Sharpe ratio. At the same time, indicators Sortino, Max Drawdown, Calmar wereused for testing alternative approaches. Findings: The analysis reveals significant shortcomings in Ukraine’s market institutions, par-ticularly in the stock market and banking sector. Weaknesses such as underrepresentation ofdefense companies and other sectors in the stock market and high levels of nonperformingloans in the banking sector pose serious challenges to national security. Comparative analy-sis of such countries like Poland and Czech Republic highlights the importance of robust in-stitutional frameworks. Analysis of WIG Ukraine and WIG CEE supports this conclusion.Institutional weakness does not allow Ukraine to maintain a stable proactive position in in-teraction with other states.Originality/value: This study contributes to the scientific discourse on institutional eco-nomics and national security by providing a comprehensive analysis of market institutionsin Ukraine. By identifying key weaknesses and comparing them with successful institutionalmodels in other CEE countries, the research underscores the urgency of institutional reformsto safeguard Ukraine’s interests and enhance its competitiveness on the global stage

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