State Support Of Private Investments

2615 words - 11 pages

Government support of several foreign investments in Slovakia without clear regulations has brought about a social discussion about fairness and profitability of such support. The Slovak republic needs new investments and therefore the government support is one of many economic tools of how they can be created or supported. However, there are certain problems regarding state support of private domestic and international companies, as for example how much should the government invest, which industry, region or company is appropriate, or whether it would be even worth to support private investments with direct cash or tax. Are there any other tools that can be used as an alternative to dir ...view middle of the document...

Because the balance of trade payments is also a part of the GDP calculation, the GPD is influenced as well.In the secondary stage the influence is connected with a more effective production, increase of qualifications of workers and managers, increase in salaries, productivity, production, multiply effects and others. The secondary stage basically represents all economic factors within a company that are influenced by the investor who enters Slovak business. The main reason that all these factors are influenced is the fact that all foreign investors bring highly sophisticated expertise from their foreign headquarters. This know-how is very often much better than our own systems of management. It is because it was developed during many years when our economy could not progress because of other economical principles which ruled our market (Era of communism). Another effect of foreign investments is the so called multiply effect that has big influence on international and domestic business as well. The reason behind is that establishing one big foreign investor in the Slovak republic will attract many other small investors. Suppliers, customers and even competitors are automatically connected with every foreign investment. It means that establishing one big factory can cause establishment of several other smaller ones, but their final effect on economy can be even bigger than the original big one. This is mostly done because the large international corporations often have long running monopoly contracts with smaller suppliers and these suppliers are suppressed to follow the investments of their "big brothers" in order to satisfy their needs.Tools to support investments in SlovakiaIn order to create a positive business environment and support foreign investments the state can use several tools to meet this aim. Here is the list of the most common:- direct cash support- tax holidays or tax decrease for a certain period of time- infrastructure development- decrease in the level of bureaucracy and law modification- regional supportIn the case of the direct cash support, or sometimes called investment incentives, the state is giving money to the investors in order to motivate them to establish their business in the country. However this way of supporting is very expensive and disputable. The state is basically giving money out of the budget which is created by our taxes for a private company. It is very often described as an economically unhealthy behavior that can frustrate the whole business environment. However, the issue also has an unseen benefit which implies that in the case of very important and strategic foreign investment, the money from the state can be a very helpful and good investment for the future. Sometimes it is the only way to deal with the poorest regions with high unemployment rate. How to differentiate between strategic interest of the state and private interests of a foreign investor?Tax holidays or tax decrease for a cert...

More like State Support Of Private Investments

Should Poor Countries Focus On Tourism - KFD - Essay

1202 words - 5 pages ... argued that in order for tourism to benefit the country, there is a huge need for a good strategic plan, proper investments and good political leadership if not countries will risk a rise in a clash of opinions and effectiveness in their tourism plans. Last but not least, it is reasonable to predict that with good tourism strategies and leadership, it can help the state/country to fully maximise the benefits of tourism investments. That can greatly help developing countries on a global scale. 4 ...

The Financing Of Tves (small And Medium Enterprises) In China

2263 words - 10 pages ... competition. China needs a diverse financial system to serve different needs, a number of non-state financial institutions should be encouraged to cater for non-stated enterprises . The government should allow the entry of new domestic private financial institutions, especially in view of WTO membership, which would open up entry opportunities to foreign financial institutions .to alleviate regulatory concerns, stricter entry and prudential requirements ...

International Business Management - Acsenda School Of Management. International Business Management - Assignment

1078 words - 5 pages ... Repatriation. Transfer of ownership of an establishment from the private to the public indicates nationalization. When the government compensates the private owners due to their losses it indicates expropriation. When the government do not provide compensation, it indicates confiscation. Transfer of ownership of state-owned property to a private body indicates privatization. A country can also limit a foreign Multi-national corporation by enforcing ...

General Electric Company Is A Diversified Industrial Corporation Engaged In Developing, Manufacturing And Marketing A Wide Variety Of Products

508 words - 3 pages Free ... of GE changed the company's strategy. It was decided that GE Equity should make investments in companies, technologies, and distribution channels that could further the strategic interests of the various GE businesses. GE Equity's venture investment goal is to build a world-class, global, private-equity business. The second goal is to extend GE's management and operating systems to other companies.Yahoo financial analysis predicts GE will ...

Paper On Gene One Benchmarking

5503 words - 23 pages ... an array of other companies researched in the synopsizes below.Individual Company SynopsizesVISAVisa, Inc is the world's largest electronic payment network. IT is located in San Francisco, California. The company provides a variety of solutions for merchants and consumers. The Visa card is accepted at over 170 countries worldwide (Visa). Similar to Intersect Investments, the company has an extensive executive management team and board of ...

The Asian Financial Crisis Research Paper

967 words - 4 pages ... budget and monetary policy( increase in non-performing loans and damage in domestic industries Drastic increase in international private capital inflow in the '90s was key to understand this crisis. Liberalization within a flawed policy framework Inadequate regulation to cope with capital inflow---lack of experience and expertise, the predominance of short-term debt (which made economies vulnerable to speculative attack), newly-licensed banks ...

Regionalization And Capital Movement

2276 words - 10 pages ... transfers, or the flow of capital, is the composition of this flow. As indicated in the preceding table, some regions (e.g., sub-Saharan Africa) are more dependent on official financial resource transfers than private capital for their economic development. Elsewhere in the South, especially in Latin America, the dominant flow of capital is private and increasingly composed more of foreign direct investments and less of bank loans (debt ...

MLB Stadium Financing

3021 words - 13 pages ... be identified, based on the foregoing review of literature and analysis of legislative efforts to inhibit such actions on the part of local jurisdictions. First, as Gingrich so ably demonstrated in his objection to the legislation proposed by Senator Moynihan (Shafroth, 1996), there is the question of whether Congress has the constitutional right to limit city bond issues in any manner at all. Those who support the right of a city (or a state ...

Negative Gearing In Australia's Housing Sytem - Queensland University Of Technology - Essay

2199 words - 9 pages Free ... current Australian housing system can be characterised by issues in affordability and a dominance of private ownership over public. Demographia (2018) recently released their annual international study on housing affordability, ranking Australia’s housing market as the third least affordable amongst the countries surveyed. This reveals a major economic problem for Australia, which is further confirmed through additional statistics. Healey (2016, p. 1 ...

Apollo Hospital

1617 words - 7 pages ... also it has set high standards. After being in this business for almost 10 to 15 years it presently has 2 hospitals, one in Madras and second at Hyderabad. This would reduce the risk of capital lockdown and long gestation periods of investments. For instance instead of fully owned hospital in Hyderabad, they would have licensed the Apollo name for any existing hospital established strategically in the city. The one at Madras is a state of art ...

Brief Report On Moroccan Fishery - Reading University, Business Management - Research Paper

1246 words - 5 pages ... consumption. · to improve the balance of payments by fish exports for hard currencies · to provide employment. In this framework, investments have been made to set up new infrastructure, to survey new markets, to train the workforce and to institute reforms. The fishery sector is playing an increasingly important role in the Moroccan economy, realizing a gross value of fishery outputs 7 761 Million DH, employing about 200 000 people and supplying about ...

General Electric - A Fortune 500 Company: Why They Continue To Be One Of The Top 15 Fortune 500 Companies

742 words - 3 pages ... unrelated to GE, with an eye toward making some money. Having understood how equity investing and growth are converged, top management of GE changed the company's strategy. It was decided that GE Equity should make investments in companies, technologies, and distribution channels that could further the strategic interests of the various GE businesses. GE Equity's venture investment goal is to build a world-class, global, private-equity business. The ...

Development Of Veitnam's Economy

3569 words - 15 pages ... economic countries in Asian.7.0: Major elements of future economical prosperity:Growing economy - Vietnam has been enjoying robust economic growth due to economic reform, a growing GDP, an increase in private Vietnamese-owned organizations, as well as the momentum from the large number of emerging foreign joint ventures [2].Increasing foreign investments - It is the consensus of many international investment analysts that Vietnam is proving to be an ...

Middle Ages Economy

1484 words - 6 pages ... their commercial and manufacturing ventures.Coventry, England, for example, flourished with its woolen cloth industry while Bruges, in modern-day Belgium, was one of the major commercial centers of the North. In the early fourteenth century, Florence's textile industry and banking catapulted the city-state into the forefront of European enterprise and, eventually, into the Italian Renaissance. Significant private international banking and ...

Why The Concept Of Democracy Is Universally Valued And Essentially Contested? - Democratic Theory - Essay

1516 words - 7 pages ... effective allocation of resources in the marketplace, and profit maximizing private activity can all be maintained in a climate of liberty, free-flowing information and secured control of property. Democracies can limit state intervention in the economy, are responsive to public's demands on area such as education, justice and health, and encourage stable and long run growth. Opponents of democracy, on the other hand, argue that democracies cannot ...