Institutional framework for the development of domestic gas transportation enterprises

Economic Annals-ХХI: Volume 158, Issue 3-4(2), Pages: 39-42

Citation information:
Zapuhlyak, I. (2016). Institutional framework for the development of domestic gas transportation enterprises. Economic Annals-XXI, 158(3-4(2)), 39-42. doi: https://doi.org/10.21003/ea.V158-09

Ivanna Zapuhlyak
PhD (Economics),
Аssociate Professor,
Ivano-Frankivsk National Technical University of Oil and Gas
15 Karpatska Str., Ivano-Frankivsk, 76000, Ukraine
zapuhlyak_ivanna@ukr.net

Institutional framework for the development of domestic gas transportation enterprises

Abstract. Introduction. One of the main conditions for further development of the national gas transportation system is the formation of a stable and transparent market for natural gas in Ukraine, which should be institutionally formalised in order to reduce uncertainty and facilitate the integration processes. Existence of clear and fair market rules, an adequate and effective legal framework and the availability of all necessary institutions are essential to attract long-term investments in the domestic gas sector. The purpose of the article is to study theoretical and applied aspects of institutional support for the development of domestic gas transmission companies in modern conditions, namely to identify the nature of the interaction of the institutional environment of the national gas transportation enterprises and possible areas for further study of their interaction and effectiveness. Results. The institutional regulation of gas transportation enterprises is a purposeful activity of influencing their development aimed at improving all the relevant elements (the strategy, the structure, the systems, the style/culture, the staff, skills and shared values) and establishing links between the actors in the natural gas market with regard to the influence of political, legal, economic, social and cultural institutions in conditions of instability. Market institutions are dominant in the process of institutionalisation of gas transportation enterprises. They include items such as private property, competition and functional infrastructure elements (banks, stock exchanges, etc.) and institutions of law (the system of legal norms that regulate the legal relationship between the actors in the gas market, the State and the population. Conclusions. The developed institutional environment that will be expressed in the form of all necessary institutions and their mutual consistency is a significant dominant in ensuring effective functioning and development of the domestic gas-transport enterprises today. In particular, proper institutional support will improve the efficiency of internal business processes at gas transportation enterprises and promote effective technical and organisational development. Under the conditions of an unstable operation of gas transportation enterprises, coordination of activities of the abovementioned institutes will reduce the level of uncertainty of the environment, ensure the effectiveness of long-term forecasting of their development, attract long-term investments and reduce transaction costs.

Keywords: Institute; Institutional Environment; Development; Gas Transportation Enterprises

JEL Classification: O100; O170; D230

DOI: https://doi.org/10.21003/ea.V158-09

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Received 10.02.2016