Conceptual approaches to qualitative risk analysis of investment projects: content, advantages, limitations

Abstract

The article substantiates a two-dimensional classification of conceptual approaches to qualitative risk analysis of investment projects and the criteria for their selection depending on the information conditions of project implementation, which is particularly relevant given the scarcity of representative data typical of the Ukrainian economy in wartime and in the post-war period. Based on the systematisation and comparative analysis of 35 scientific sources and international risk management standards, five conceptual approaches – expert-heuristic, structural-classification, analogue, matrix-rating and scenario-based – and a hybrid direction of their development are identified and mapped onto three levels of procedural formalisation: simplified, standard and model-based. The place of each approach in the risk analysis process covering planning, risk assessment and risk treatment is determined. The advantages, limitations and critical success factors of each approach are systematised. It is shown that the matrix-rating approach, despite its dominance in practice, has the lowest robustness to cognitive biases, and colour coding of matrices may distort users' decisions; therefore, it should be used only for initial screening and for communicating results. A suitability matrix based on five criteria is developed, and it is established that under data scarcity, high project uniqueness and environmental turbulence, scenario-based and expert-heuristic approaches are the most suitable, provided that procedural safeguards are observed. A sequential configuration of qualitative analysis is proposed, combining updated classifications and root cause analysis, the Delphi procedure, scenario-based testing of project resilience, a risk matrix for communication, and the transfer of critical risks to simulation modelling. The scientific novelty lies in improving the classification of qualitative risk analysis methods by combining the source of knowledge about risk with the level of procedural formalisation. The practical significance of the work lies in the possibility of using the results by analysts, investors, banks and project managers when preparing investment projects for the recovery of Ukraine's economy.