MODELLING THE COSTS OF PUBLIC ASSOCIATIONS FOR THE DEVELOPMENT OF ADVISORY ACTIVITY

Abstract

Yevchu S.A. MODELLING THE COSTS OF PUBLIC ASSOCIATIONS FOR THE DEVELOPMENT OF ADVISORY ACTIVITY

Purpose. The aim of the article is to describe a model for estimating the costs of public associations of the agrarian sector of the economy for the development of advisory activity using economic and mathematical modelling tools.

Methodology of research. The main results of the study were obtained through the use of general and special methods of scientific research. In particular, the transaction cost theory and neo-institutional theory were applied to determine the transaction and production costs of public associations of the agricultural sector of the economy; the tools of economic and mathematical modelling, empirical, analytical and graphical methods, the Pareto Law, the Law of Supply and Demand, the Coase Theorem made it possible to develop a model of the costs of public associations of the agricultural sector of the economy for advisory activity; methods of theoretical generalization, methods of forecasting and planning of costs and revenues were used to generate data for modelling, and the formal-legal method was used to analyse the legislation regulating the activities of public associations with non-profit status.

Findings. The empirical dependence between production costs and transaction costs required for creating systemic industry and professional knowledge and their dissemination through commercial (paid) services was established. The expenses that public associations can direct to forming advisory services were substantiated. An understanding of the objective basis for pricing for paid advisory services was obtained. The theoretical principles of the competitiveness of paid services of public associations in the advisory services market and the approach to modelling the most effective way of providing advisory services were deepened.

Originality. A model for estimating the costs of public associations of the agrarian sector of the economy for the development of advisory activity was developed to meet the needs of internal (members of public associations) and external stakeholders (other consumers of services who are not members of public associations) in consulting, information and organizational and managerial support through the creation of systemic industry and professional knowledge and the provision of commercial (paid) services.

Practical value. The obtained research results can be used by a public association to create systemic industry and professional knowledge and disseminate it through the provision of commercial (paid) services.

The formed idea of the empirical dependence between production costs and transaction costs establishes a basis for making management decisions in public associations of the agricultural sector of the economy regarding the development of advisory activity. It deepens theoretical and applied approaches to the formation and development of advisory activity in public associations of the agricultural sector of the economy. The research results expand scientific approaches to determining non-profit organizations’ costs for providing commercial (paid) services.

Key words: institutional theory, agrarian advisory system, advisory subjects, management activities, public associations, non-profit organizations, agrarian advisory services, stakeholders, production costs, transaction costs, commercial (paid) services.