Page 141 - Theoretical and Practical Interpretation of Investment Attractiveness

⃰ uneven distribution of inter-subject financial, labor and material resources of the world
economy;
⃰ variety of natural and ecological conditions;
⃰ overaccumulation of real capital resources in one area, and shortage in other areas;
⃰ accumulation of financial resources;
⃰ diversity of investment conditions and policies for its development in the countries of
the world.
As mentioned above, at the moment, the share of foreign investment in import and
export from one country to another country is mostly accounted for by TM companies and
TM banks. Movement of capital occurs due to their high desire to capture new consumer
markets, approach the market of raw materials and labor resources.
The main reasons for capital export are the following:
1. Striving to be the first technologically. To increase the sales volume by allocating
more funds to scientific-technical and scientific achievements by corporations, to gain a
leadership position without losing the first place in the creation and use of high technologies.
A high share of such costs in total costs ensures a large volume of direct investment exports
or vice versa.
2. Labor force potential and qualification. When determining this factor, the level and
value of wages paid to labor are taken into account. Higher wages paid to labor in corporations
ensure growth in the volume of investment exports.
3. To have priority in the implementation of advertising. There is a direct relationship
between the corporations' advertising spending and the corporation's sales volume and FDI's
export investment.
4. Scale effect. First, corporations maximize their capacity to meet the needs of the
domestic market (using economies of scale), and then export the free resources abroad for
profit. Therefore, the higher the share of the corporation in the domestic (national, local)
markets, the higher the volume of foreign direct investment exports.
5. The size of the corporation. There is a direct relationship between the size of the
corporation (large and small) and the volume of investment exports.
6. Concentration of production. A higher level of concentration in the production of a
certain commodity (by the cross-section of corporations) indicates a higher level of direct
investment exports. There is a direct connection between them.
7. Level of ownership of natural resources. Due to the high demand of corporations
for a certain natural resource, the influx of investments into countries that have this resource
increases.
It should be noted that some of the factors that lead to the export of investments are:
striving to be the first technologically; skill level of the workforce; to have priority in the
implementation of advertising; efficiency of scale; the size of the corporation; In addition to
factors such as concentration of production, the following factors affect the import of
investments:
1. The need for capital. There is a direct relationship between the capital needs of
corporations, size and investment imports.
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