International migration of capital. International capital movement
Natalia
Group: 25TDd14201.
2.
3.
4.
5.
6.
Theories of international migration
capital
World investment and savings
International capital migration:
essence, stages and forms
Migration of capital to
entrepreneurial form
Migration of loan capital
Internationalization of the capital market and
problems of its regulation
Question 1. Theories of international capital migration
International capital migration isprocesses of counter movement of capital
between different countries of the world
farms
regardless
from
level
them
socio-economic
development,
generating additional income
owners.
Theories of international capital migration:
Neoclassical theories
Neo-Keynesian theories of economic growth
Marxist theories of capital export
The concept of international development
corporations Neoclassical theory was based on
views of J.St. Mill:
exported
that part of the capital which
contributes to lowering the rate of profit
capital import improves production
specialization of countries and promotes
expansion of foreign trade.
capital is mobile in
internationally Neo-Keynesianism (late 30s - early 50s
years .. XX century.)
An important reason for the international
capital flow is a state
balance of payments. If the balance of payments
balance is positive, then the country can become
capital exporter. The international
capital movements should be regulated
state.
F. Machlup: Export of capital, influencing
domestic investment may limit them. IN
capital-importing countries are stimulated
growth in investment, which increases consumption and
growth in national income.
R. Harrod: If a country's savings exceed
investment, the rate of economic growth
are slowing down, the tendency to export is increasing
capital.
E. Domar: it is necessary to expand state
foreign investment and regulate the rate
interest on them to ensure a positive
balance of payments balance. Marxist theory of capital export
justified its excess in connection with
by the law of tendency of the norm
profits to decline. Capital is exported
abroad because he may be there
placed at a higher rate of return.
IN.
I. Lenin associated the export of capital with
unevenness, peculiarity of development
enterprises, industries and countries in the conditions
the dominance of the monopolies.
In the process of evolution of Marxist theory
as reasons for the export of capital
considered increasing internationalization
production, increased competition between
monopolies, increasing the pace
economic growth. An important place among modern theories
occupy the theory of international
corporations:
The theory of economies of scale.
Technological theory of international
corporations associates their emergence with
technological advantages of head
companies in developed countries.
International Organization Theory
explores the reasons why
reaching a certain size
national corporations tend to
international organization.
Placement theory explains why
determining the location
production.
Internationalization theory (P. Buckley,
J. McManus, M. Casson, J. Dunning and others),
studies the problem of intercompany relations
international corporations.
Question 2. World investment and savings
The demand for capital as a financial asset exists inform of global investment. World
savings is an offer
financial resources.
The movement of capital is reflected in the payment
balance sheet in the capital account.
If the capital account is positive, then
the country will become an importer (borrower) of capital.
If the capital account is negative, then the country
exports capital and is a creditor.
The movement of capital is connected with the movement of goods
and services:
They are mutually opposite, therefore, in the payment
balance sheet are taken into account with different signs;
Ideally, they balance each other. This equation
is the main macroeconomic
identity. The intensity of capital migration to
largely determined
the degree of openness of the country's economy and
the value of the existing rate in it
percent:
In a country with a closed economy, the inflow
capital is zero for any domestic
real interest rate.
In a country with a small open economy, inflows
capital can be anything
world interest rate (country, not
affects the level of world interest
rates)
In a country with a large open economy
there is a positive relationship
between the inflow of capital and the value
domestic interest rate. That's why
the value of the world interest rate in
will be determined to a large extent
the economic
politics.
Question 3. International migration of capital: essence, stages, forms
The first stage in the evolution of international migrationcapital (MMK): from the XVII-XVIII centuries. until the end of the 19th century:
"the stage of the birth of the export of capital." Capital
migrated from metropolises to colonies and wore
limited and random.
The second stage in the evolution of MMK from the end of the 19th to the middle
XX century: the process of export of capital is carried out as
between industrial countries and between
industrial and developing countries.
The third stage from the mid-50s-60s of the XX century. before
present: The export of capital is carried out
industrialized, developing and former
socialist countries. Countries at the same time
become both exporters and importers of capital. The development of the MMK process is influenced by two
groups of factors, including:
factors
economic nature:
development of production and maintaining the pace
economic growth; deep structural
shifts as in the global economy; deepening
international specialization and cooperation
production; growing transnationalization
world economy; growth
internationalization of production and
integration processes; active development
all forms of MEO;
political factors:
liberalization of export/import of capital
(FEZ, offshore zones, etc.); politics
industrialization in the countries of the "third world";
carrying out economic reforms; politics
employment support. Economic feasibility of export
capital
obtaining additional profits;
establishing control over others
subjects;
bypassing protectionist barriers;
access to new markets;
access to the latest technologies;
access to cheaper resources;
keeping trade secrets;
savings on tax payments;
reduction in environmental protection costs
environments, etc. Economic feasibility of import
capital
opportunities
development of certain new and
old productions;
attraction of additional foreign exchange
resources;
expansion of scientific and technical potential;
creation of additional jobs, etc. Participation of the country in the CMI processes
reflected in a number of indicators.
Absolute indicators: export volume
capital, volume of capital imports, balance
export-import of capital, number
enterprises with foreign capital
country, the number of people employed, etc.
Relative indicators:
capital import ratio reflecting
the share of foreign capital in the country's GDP;
capital export ratio reflecting
share of exported capital by
relation to the country's GDP;
ratio reflecting the share
foreign capital to domestic
investment needs in the country.
1.
2.
3.Investment resource flows
mix to:
macro level: interstate, or
official, capital overflow
(interstate loans, official
assistance, loans from international financial
organizations, etc.)
microlevel: at the level of intercorporate
and intra-corporate relations,
interbank loans, etc. Financial flows between creditors and
borrowers are serviced by the institution
financial intermediaries:
private
national and
international financial and credit
institutions.
state represented
treasury, issuing and export-import banks and other
authorized institutions;
interstate banks and foreign exchange
funds. According to the form of ownership of the migrating
capital
private,
state,
international
(regional),
monetary and financial
organizations,
mixed. By timing of capital migration
ultra short term
(up to 3 months),
short-term (up to 1-1.5 years),
medium-term (from 1 year to 5-7 years),
long-term (over 7 years and up to 40-45) According to the form of capital provision
commodity,
monetary,
mixed.
Purpose and nature of use
migrating capital
entrepreneurial,
loan. Among the migrant capital: more than
50% owned by private entities -
these are corporations, TNCs, banks, shares,
insurance, investment and pension
funds, etc.
Trends:
Reducing the share of banks
Growth in the share of capital of TNCs
The share of state capital - about 30%
and tends to increase
The share of international monetary and credit
financial organizations - about 12%, has
upward trend
Private equity movement
characterized by moving along the following
directions:
between highly developed countries
industry where there is movement
portfolio investment;
to countries that already have significant
industrial potential, where direct investment
more significant than portfolio;
to countries with underdeveloped economies, but
rich in raw materials, where
only direct capital
investments. Migration of capital in business
form implies a mandatory
the presence of three signs:
First, the organization and participation in
production process abroad;
second, long term
investments of foreign capital;
Third, the ownership of
the company as a whole or part of it
territory of another state. Direct
foreign investment is
long-term foreign investments
capital, as a result of which
the exporter of capital organizes or
production is carried out in the territory
host country.
Portfolio
investment is a form
export of capital by investing in
securities of foreign companies,
not giving investors the opportunity
direct control over them
activity.
Question 4. Migration of capital in the entrepreneurial form
The concept of foreign direct investmentincludes:
Share capital;
intra-company transactions;
Reinvested income;
intangible income. Foreign portfolio investment
include:
Financial
instruments: bonds,
shares, money market instruments;
Derivatives (derivative financial
instruments): options, forward
contracts, etc. Positive impact of FDI on the economy:
Growth of capital investments;
Promoting technology transfer;
Expanding access to export markets;
TNCs fully cover the risks of their
branches;
Transfer of practical skills and
management skills;
Multiplier effect;
Activation of competition;
Expanding the host tax base
country;
Growth in employment and income, etc. Negative impact of FDI on the economy:
Loss
control by local companies
over national production;
Crowding out of national companies;
Negative effect on the state of the payment
balance;
In the long run, it's expensive. The positive impact of PI on the economy:
Contribution
in the financing of capital investments;
Promoting consumption growth;
Stimulating the liquidity of banks and
the economy as a whole;
Contribute to the strengthening of financial
infrastructure. The negative impact of PI on the economy:
High
financing costs;
The possibility of increasing financial speculation;
High risk of instability. Since the 1960s, a global market has been formed
foreign investment. Prerequisites:
removal by many countries of restrictions on
management of export-import operations
capital;
privatization of state companies
in Western Europe and Latin America in
60-70s;
privatization of enterprises in the former
socialist countries. Current migration trends
capital in the entrepreneurial form:
the dynamics of capital exports traditionally
ahead of the dynamics of exports of goods;
an increase in the number of mergers and acquisitions of firms;
the growing role of TNCs;
shift in the sectoral structure of foreign
investments from manufacturing
industry and trade to investment in
knowledge-intensive industries and services (more than
55%);
a system of international
regulation of foreign investment;
high concentration;
there is a change in geographic
directions of foreign investments.
Question 5. Migration of loan capital
Loan capital is the provisionloans in cash or commodity form
in order to receive a high percentage from abroad. Loan form MMK
implemented in the following operations:
issuance of state
purchase of bonds
and private loans;
another country
securities, bills;
making payments on debts;
interbank deposits;
interbank and government
debt. Fast
loan export growth rate
capital and significant in volume
recurring transactions internationally
level led to the formation in the late 60s and early 70s of the XX century of the world
loan capital market.
World
loan capital market (MRSK)
is a system of relationships
accumulation and redistribution
loan capital between countries
world economy, regardless of
level of their socio-economic
development. The global loan capital market has
complex structure and includes:
World
the credit market is a special
IDGC segment where traffic is carried out
capital between countries on the terms
urgency, repayment and interest payments.
World
financial market is a segment
IDGC, where the issue and purchase and sale of securities and various
obligations.
In the primary market,
issuance of bonds, shares and
etc., in the secondary market there is a purchase and sale of previously issued securities. Features of the global loan market
capital at the present stage of development:
High degree of monopolization of this
market.
Concentration of loan capital through
mergers and interweaving of subjects
IDGC.
Borrowers' access to IDGCs is limited.
IDGC has potential
instability.
IDGCs lack clear spatial
and time limits.
IDGC is closely associated with modern research and development.
IDGCs are characterized by universality and
unification of operations.
Question 6. Internationalization of the capital market and problems of its regulation
Strengthening international traffic flowscapital leads to the following results:
The ratio between the centers changes
attracting global investment. Industrial
countries in the 1990s became net exporters of capital.
Developing countries are increasing not only imports,
but also the export of capital
There are changes in the structure of forms and
investment institutions. In total
investments are dominated by portfolio investments.
Increasing interpenetration of all types
international investment. Between two
segments of the financial market - currencies and capitals
boundaries are gradually blurred. In this way,
extraterritorial in relation to
national economy financial centers, or
offshore areas. The main features of globalization
financial capital are:
superior development over
real asset market
Freedom of movement in modern
economic space
Lack of nationality and
predominantly speculative
The global financial market is getting weak
controlled The activity of participating in the export of capital to any
country depends on the investment climate in the country,
importing capital.
The investment climate is
set of economic, political,
legal and social factors that
predetermine the degree of risk of foreign
investment and the possibility of
efficient use in the country.
One of the main directions of formation
favorable investment climate is
providing foreign investors with legal
treatment no less favorable than national
simultaneous protection of the national economy from
unscrupulous foreign investment.
slide 1
International movement of capital Municipal educational institution "Secondary school No. 1" of the city of Valuyki, Belgorod region Presentation for a lesson-lecture on economics in grade 11 (profile level) Teacher of history and social studies: Gitelman V.L 2015slide 2
Plan: 1). International loan capital market; 2).Euromarket; 3). External debt of developing countries; 4). International financial organizations; five). Russia in the world loan capital market; 6). Export of entrepreneurial capital and the role of TNCs in global capital; 7) Russia as an importer and exporter of entrepreneurial capital.
slide 3
1. International loan capital market. Structure: 1) money market (short-term capital - up to one year, loans and borrowings against bills); 2) capital market (medium-term, long-term - up to 10 years loans secured by securities); 3) financial market (issue of securities and transactions with them) Securitization - issuance of asset-backed securities
slide 4
Types of loans: - by form: commercial (for foreign trade) financial (other purposes) commodity (in the form of deferred payment) currency (in cash) - by purpose: related (target nature) unrelated (the country determines itself) - by the borrower: syndicated - provided by a group of banks
slide 5
slide 6
2. Euromarket (50-60s of the XX century) - a set of transactions with funds that function as loan capital outside national borders and do not fall under the national financial control of countries (currency issuers) - 25 world centers (13 European)
Slide 7
Prerequisites for formation: Accumulation of foreign currency on accounts abroad (especially in Europe) Attractiveness due to low interest rate Rate = base (London Interbank Deposit Market Rate (LIBOR) + spread (fixed markup)
Slide 8
Slide 9
3. External debt of developing countries Features: 1) 80s - debt crisis of more than 70 countries (request for restructuring) 2) External debts began to be converted into shares, bonds 3) Part of the debt is written off 4) The share of those experiencing difficulties with payment has decreased 5 ) Official development assistance is applied (subsidies, concessional loans, etc.)
slide 10
slide 11
4. International financial organizations 1) IMF - only to official state bodies, - for 5-10 years - targeted nature - the presence of certain conditions (development program, etc.) "-" - curtailment of social programs, subsidies, etc.
slide 12
2) The World Bank. Structure: 1. IBRD (World Bank); 2. International Development Association; 3. International Finance Corporation; 4. Multilateral Investment Guarantee Agency; 5. International Center for the Settlement of Investment Disputes.
slide 13
5. Russia in the world loan capital market Main creditors: Germany, USA, Italy Since 1992 - member of the IMF, the World Bank. Reasons for low solvency: 1) Having to pay the debts of the USSR 2) Export of capital abroad Sources: Deferred payments Debt claims on developing countries Export of loan capital
slide 14
slide 15
6. Export of entrepreneurial capital: 1) foreign direct investment - the establishment of an enterprise (or part) abroad (the investor owns> 10%) 2) portfolio investment - this is foreign investment in small blocks of shares
slide 16
TNC-company with branches in five or more countries The motives for placing direct investments of TNCs abroad: 1) cost savings 2) the desire to gain a foothold in a new market 3) the creation of a transnational system of division of labor 4) obtaining max. profits through minimal taxation 5) the desire to use a favorable investment climate
slide 17
7. Russia as an importer and exporter of entrepreneurial capital Opportunities to attract direct investment: 1) a capacious domestic market 2) a developed scientific and technical potential 3) a production base 4) a cheap and skilled labor force 5) an abundance of natural resources
slide 18
Reasons for the shortage of direct investment: 1) imperfection of tax legislation 2) underdevelopment of industrial and business infrastructure 3) weakness of the judicial system
International capital migration is the movement of capital between countries, including the export, import of capital and its functioning abroad. International capital migration is the movement of capital between countries, including the export, import of capital and its functioning abroad. Capital migration is an objective economic process when capital leaves the economy of one country in order to obtain a higher income in another country.
The international movement of capital occupies a leading place in international economic relations, has a huge impact on the world economy: The international movement of capital occupies a leading place in international economic relations, has a huge impact on the world economy: 1. contributes to the growth of the world economy; 2.deepens the international movement of capital and international cooperation; 3.increases the volume of mutual trade between countries, including intermediate goods, between branches of international corporations, stimulating the development of world trade.
The main subjects of the world capital market are private business, states, as well as international financial organizations (World Bank, International Monetary Fund). The main subjects of the world capital market are private business, states, as well as international financial organizations (World Bank, International Monetary Fund).
The global capital market is part of the global financial market and is conditionally divided into two markets: the money market and the capital market. The global capital market is part of the global financial market and is conditionally divided into two markets: the money market and the capital market. In the money market, transactions are carried out for the purchase and sale of financial assets (currencies, credits, loans, securities) with a maturity of up to one year. The money market is designed to satisfy the current (short-term) need of market participants for credits and loans to purchase goods and pay for services. A significant part of transactions in the money market are speculative transactions for the purchase and sale of currencies. The capital market is focused on longer-term projects with a period of implementation of one year or more.
Participants in the international capital market are commercial banks, non-banking financial institutions, central banks, private corporations, government agencies, as well as some individuals. Participants in the international capital market are commercial banks, non-banking financial institutions, central banks, private corporations, government agencies, as well as some individuals.
Reasons for the export of capital - the possibility of monopolizing the local market of the host country; availability in countries receiving capital, cheaper raw materials and labor; stable political situation in the recipient country; lower environmental standards compared to the donor country; the presence of a favorable "investment climate" in the host country;
The concept of "investment climate" includes parameters such as: the use of labor force, the level of taxes in the country; state policy regarding foreign investment: compliance with international agreements, the strength of state institutions, the continuity of power.
Migration of capital can be carried out in the form of entrepreneurial and loan capital. Migration of capital can be carried out in the form of entrepreneurial and loan capital. Loan capital - funds directly or indirectly invested in production in order to obtain loan interest from the use of capital abroad. The movement of loan capital is carried out in the form of an international loan from public or private sources. Entrepreneurial capital - funds directly or indirectly invested in production for the purpose of making a profit. The movement of entrepreneurial capital is carried out through foreign investment, when private individuals, state-owned enterprises or the state invest abroad.
According to sources of origin, capital is divided into official and private capital. According to sources of origin, capital is divided into official and private capital. Official (state) capital is funds from the state budget that are transferred abroad by decision of governments, as well as by decision of intergovernmental organizations. It moves in the form of loans, loans and foreign aid. Private (non-state) capital is the funds of private companies, banks and other non-governmental organizations that are moved abroad by decision of their governing bodies and their associations. The source of this capital is the funds of private firms not related to the state budget. These may be investments in the creation of foreign production, interbank export credits. Despite the autonomy of companies in making decisions about the international movement of their capital, the government reserves the right to control and regulate it.
According to the purpose of foreign investment, capital is divided into direct investment and portfolio investment: According to the purpose of foreign investment, capital is divided into direct investment and portfolio investment: Foreign direct investment is an investment of capital with the aim of acquiring a long-term economic interest in the country of investment of capital, ensuring investor control over the object of placement of capital . They take place in the case of the creation of a branch of a national company abroad or the acquisition of a controlling stake in a foreign company. FDI is real investment in enterprises, land, and other capital goods. Portfolio foreign investment - capital investment in foreign securities that do not give the investor the right to control the investment object. Portfolio investments lead to the diversification of the portfolio of an economic agent, reduce the risk of investment. They are based on private entrepreneurial capital, although the state also issues its own and acquires foreign securities. Portfolio investments are purely financial assets denominated in local currency.
According to the investment period, long-term, medium-term and short-term capital is distinguished: According to the investment period, long-term, medium-term and short-term capital is distinguished: Long-term capital - capital investments for a period of more than 5 years. All investments of entrepreneurial capital in the form of direct and portfolio investments are usually long-term. Medium-term capital - capital investment for a period of 1 to 5 years. Short-term capital - capital investment for up to 1 year.
They also distinguish such forms of capital as illegal capital and intra-company capital: They also distinguish such forms of capital as illegal capital and intra-corporate capital: . Intra-company capital - transferred between branches and subsidiaries (banks) owned by the same corporation and located in different countries.
The positive and negative effects of capital migration are rather conditional and do not take into account numerous exceptions. Nevertheless, the international movement of capital plays a generally stimulating role in the development of the world economy. The positive and negative effects of capital migration are rather conditional and do not take into account numerous exceptions. Nevertheless, the international movement of capital plays a generally stimulating role in the development of the world economy.
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International capital movement
Municipal educational institution "Secondary school No. 1" of the city of Valuyki, Belgorod region
Presentation for the lesson-lecture on economics in grade 11 (profile level)
Teacher of history and social studies: Gitelman V.L.
Plan: 1). International loan capital market; 2).Euromarket; 3). External debt of developing countries; 4). International financial organizations; five). Russia in the world loan capital market; 6). Export of entrepreneurial capital and the role of TNCs in global capital; 7) Russia as an importer and exporter of entrepreneurial capital. 1. International loan capital market. Structure: 1) money market (short-term capital - up to one year, loans and borrowings against bills); 2) capital market (medium-term, long-term - up to 10 years loans secured by securities); 3) financial market (issue of securities and transactions with them) Securitization- release valuable papers secured by assets Types of loans:
- - according to the form:
- commercial (for foreign trade)
- financial (other purposes)
- commodity (in the form of deferred payment)
- currency (in cash) - by appointment:
- related (target character)
- unrelated (country defines itself) - by borrower: syndicated - provided by a group of banks
2. Euromarket (50-60s of the XX century) - a set of transactions with funds that function as loan capital outside national borders and do not fall under the national financial control of countries (currency issuers) - 25 world centers (13 European) Education background:
- Accumulation of currency on accounts abroad (especially in Europe)
- Attractiveness due to the low rate Rate = Base (London Interbank Deposit Market Rate (LIBOR) + spread (fixed premium) The higher the borrower's rating, the lower the interest rate
Test yourself.
3. External debt of developing countries
- Peculiarities:
- 1) 80s - debt crisis of more than 70 countries (request for restructuring)
- 2) External debts began to be converted into shares, bonds
- 3) Part of the debt is written off
- 4) Decreased proportion of those experiencing difficulties with payment
- 5) Official development assistance is applied (subsidies, concessional loans, etc.)
Test yourself.
4.International financial organizations
- 1) IMF
- - only official government bodies,
- -for 5-10 years
- -target character
- -presence of certain conditions (development program, etc.) "-" - curtailment of social programs, subsidies, etc.
- Since 1992 - member of the IMF, the World Bank. Reasons for low solvency: 1) Having to pay the debts of the USSR 2) Export of capital abroad Sources:
- Payment deferrals
- Debt claims on developing countries
- Export of loan capital
Test yourself.
6.Export of entrepreneurial capital:
- 1) foreign direct investment - the establishment of an enterprise (or part) abroad (the investor has more than 10%)
- 2) portfolio investment is foreign investment in small blocks of shares
- Motives for placing direct investments of TNCs abroad:
- 1) cost savings
- 2) the desire to gain a foothold in a new market
- 3) creation of a transnational system of division of labor
- 4) getting max. profits through minimal taxation
- 5) the desire to use a favorable investment climate
- Opportunities to attract direct investment:
- 1) capacious domestic market
- 2) developed scientific and technical potential
- 3) production base
- 4) cheap and skilled labor
- 5) abundance of natural resources
- 1) imperfection of tax legislation
- 2) underdevelopment of industrial and business infrastructure
- 3) weakness of the judicial system
Give me a definition:
Homework
- § 18.1-learn lesson abstracts, economic terms
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