Theories of international investment
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Despite the fact that the time continuum of international investment practice ahead of theory, then the dominant theoretical concepts began to be intellectual foundation behavior of international investors. cross
The first theory of international investing is the theory of capital movements, based on the assumption that there is pure competition, and argues that the subjects of foreign economic relations exercise productive foreign investment in order to obtain higher profits abroad than from activities in the domestic market.
Theory of capital movements goes back to the teachings of classical economics. In fact, all the representatives of this direction of economic doctrines have paid special attention to the issue of international capital flows. It started classical cross macroeconomic approach to the analysis of international investment process, which was later expanded and fleshed out in the neoclassical, Keynesian cross and approaches. However, their position had certain characteristics. First, capital flows are not considered in isolation from the problem of foreign trade. To do this, a number of objective cross reasons, namely in terms of the gold standard foreign trade operations were carried out based on the movement of gold, which was interpreted as movement of capital, although the movement of capital in the form of more substantial investments separated from foreign trade. Secondly, the problem of import and export in the form of capital investments considered from the standpoint cross of mutual conditionality between production, consumption and savings, which determined to lack or excess of resources for investment in the country. Third, the rate of return and the value of the loan determined percentage factors leading to capital movements between countries. In this case, these determinants of international investment directly affect the balance between production cross and consumption and savings and investment in each country.
Yes, Adam Smith, defended the thesis on the effects of free market forces, noted that the free movement of capital between countries contributes to its overall cheaper. Thus, the export of capital leads to his rise in donor countries, and imports - cheaper in the host country. As a result of the free flow of capital does not exist nor its excess or deficiency, since the return cross on capital will koresponduvaty of its consumed quantity. It is not the first time drew attention to the relationship between foreign trade and migration capital. If foreign trade based on absolute advantage, the excess of imports cross over exports mean export of capital. When exporting capital recipient country receives additional benefits, including on their that will enhance the inflow of goods to the donor country and continue to encourage the export cross of capital from it as long as it does not lead to a lack of increasing the rate of productivity. It is therefore necessary to provide guidance in the area of capital with absolute advantage in order to maintain the value of such exports, which would not be lower than the value of imports.
Ricardo Smith developed the idea of the role of the free movement of capital to ensure cross a balance between production and consumption. cross Thus, the accumulation of capital in the country is associated with an increase in savings rate. The increase in productivity (due to increased capital intensity of product) trading and orientation relative advantages trends could lead to an excess of savings, reduce the profitability of the production factor capital, maintenance of investment and the slowdown in the economy. However, international investment activities are considered as a kind of Ricardo channel through which surplus capital is directed to countries with its shortage, which is why the problem of overproduction in one country does not arise. The mechanism that leads into effect movement of international capital once again speaks the rate of profit and interest fluctuations which in the context of the situation reflects the relative security of capital.
The famous French artists of classical political economy JB Say for the first time considered the issue of the international movement of capital by its relationship with monetary and investment policies in the country. In particular, he noted that the rejection level of investment of savings, because the first part financed by loans related to the money supply. However, the latter is a factor of lower interest rates and higher prices, cross which could in a relatively short term investments to promote consumption, while in the long term - to perform a factor excess investment and escape
International Finance Foundation Task History Support Main activities Financial Policy Subdivisions cross Regional Funds Legislation Library entrepreneur Articles News Innovation Management Address Key events in the history of Ukraine Capital Management Basics investment diagnosis Marketing Economic Policy
Despite the fact that the time continuum of international investment practice ahead of theory, then the dominant theoretical concepts began to be intellectual foundation behavior of international investors. cross
The first theory of international investing is the theory of capital movements, based on the assumption that there is pure competition, and argues that the subjects of foreign economic relations exercise productive foreign investment in order to obtain higher profits abroad than from activities in the domestic market.
Theory of capital movements goes back to the teachings of classical economics. In fact, all the representatives of this direction of economic doctrines have paid special attention to the issue of international capital flows. It started classical cross macroeconomic approach to the analysis of international investment process, which was later expanded and fleshed out in the neoclassical, Keynesian cross and approaches. However, their position had certain characteristics. First, capital flows are not considered in isolation from the problem of foreign trade. To do this, a number of objective cross reasons, namely in terms of the gold standard foreign trade operations were carried out based on the movement of gold, which was interpreted as movement of capital, although the movement of capital in the form of more substantial investments separated from foreign trade. Secondly, the problem of import and export in the form of capital investments considered from the standpoint cross of mutual conditionality between production, consumption and savings, which determined to lack or excess of resources for investment in the country. Third, the rate of return and the value of the loan determined percentage factors leading to capital movements between countries. In this case, these determinants of international investment directly affect the balance between production cross and consumption and savings and investment in each country.
Yes, Adam Smith, defended the thesis on the effects of free market forces, noted that the free movement of capital between countries contributes to its overall cheaper. Thus, the export of capital leads to his rise in donor countries, and imports - cheaper in the host country. As a result of the free flow of capital does not exist nor its excess or deficiency, since the return cross on capital will koresponduvaty of its consumed quantity. It is not the first time drew attention to the relationship between foreign trade and migration capital. If foreign trade based on absolute advantage, the excess of imports cross over exports mean export of capital. When exporting capital recipient country receives additional benefits, including on their that will enhance the inflow of goods to the donor country and continue to encourage the export cross of capital from it as long as it does not lead to a lack of increasing the rate of productivity. It is therefore necessary to provide guidance in the area of capital with absolute advantage in order to maintain the value of such exports, which would not be lower than the value of imports.
Ricardo Smith developed the idea of the role of the free movement of capital to ensure cross a balance between production and consumption. cross Thus, the accumulation of capital in the country is associated with an increase in savings rate. The increase in productivity (due to increased capital intensity of product) trading and orientation relative advantages trends could lead to an excess of savings, reduce the profitability of the production factor capital, maintenance of investment and the slowdown in the economy. However, international investment activities are considered as a kind of Ricardo channel through which surplus capital is directed to countries with its shortage, which is why the problem of overproduction in one country does not arise. The mechanism that leads into effect movement of international capital once again speaks the rate of profit and interest fluctuations which in the context of the situation reflects the relative security of capital.
The famous French artists of classical political economy JB Say for the first time considered the issue of the international movement of capital by its relationship with monetary and investment policies in the country. In particular, he noted that the rejection level of investment of savings, because the first part financed by loans related to the money supply. However, the latter is a factor of lower interest rates and higher prices, cross which could in a relatively short term investments to promote consumption, while in the long term - to perform a factor excess investment and escape
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