Investment From Abroad is Right or Wrong?
INTRODUCTION One characteristic of globalization in the financial services industry is improving access to non-local investors, provided several important markets in the world. Increasingly allow trading in emerging markets institutional investors in their domestic markets to act. Indian stock market opens to foreign institutional investors in the September 14, 1992, initially with many limitations. The regulations themselves are now liberalized and minimized, since 1993 a substantial amount of portfolio investment by foreigners to get in shape, when FIIs invest in shares. This led to a turning point in the Indian stock market. The Government is aware of India, government policy to allow FII investment in Indian capital market. According to the SEBI Regulation 14-11-1995. To invest in Indian stock market, they wanted the Security Exchange Board of India to register as foreign institutional investors. It is possible for foreigners in Germany, securities without being registered as foreign institutional investors to trade, but such cases, permission Reserve Bank of India or the foreign policy of the Council of Institutional Advancement. They are usually concentrates on the secondary market. Domestic market alone has lost unable to meet the growing capital needs of the country and funding bodies mutilated mainly in emerging economies in the world order. To ensure the well-debt creating capital inflows in the first place in a time of extreme balance of payments crisis. It was about the balance of payments crisis of the early 1990s, tie Portfolio flows often “hot money” flows are notoriously volatile capital. They are also responsible for the spread of financial crisis contagion in the international market. But Evan was the FIIs Folding an important role in financial markets since their entry into this country. The portfolio flows explosives FII brings with them great benefits, because they are an engine of growth, reduction of capital in many emerging countries. The opening of capital markets in emerging economies was seen as beneficial by some researchers, while others are on the possible negative consequences. Clark and Berko (1997) emphasize the positive, so that a foreign stock markets to trade and the breakdown? Base broadening? Hypothesis. The perceived benefits of the expansion base by increasing the investor base and the resulting reduction of the risk premium due to risk spreading. Other researchers and policy makers about the risks associated with trading foreign investors involved. They are particularly concerned about the herd behavior of foreign institutions and the possible destabilization of emerging stock markets. This study addresses these issues in the context of foreign institutional investorsâ? Â (IFI), the trading activity in the large emerging countries? India. India has liberalized its financial markets and FIIs allowed to participate in their domestic market in 1992. Supposedly, this openness has led to a series of positive effects. First, exchanges were forced to improve the quality of trade and customs procedures in line with best practices worldwide. Second, improve the information environment in India with the advent of major international financial centers, institutional investors in India. On the negative side, we must consider the potential destabilization due to the activity of foreign institutional investors. This is particularly important in an emerging country that has undertaken reforms to open its market. OBJECTIVES The objectives of this study were as follows; (1) For the role of investment in the study FII Indian Stock Market (2) the causal relationship between net FII investment and BSE Sensex Granger causality test (3) the causal relationship between net investment and R II NSE DAX Check, check to test Granger causality (4) to examine if FIIs have been a channel of disturbance overall Indian stock market. TOOLS: study was conducted with the help of unit root test, test co-integration, causality and regression F statistic for investment and FII index of the BSE and NSE LETERATURE COMMENTS Gayathri Devi. R in 2003, study on â? Causal link between FIIs and Stock Market: A Critical Studya ????. It was found that long-term relationship between net FII investment and DAX have FII investments are not answered by the last-minute changes, or technical position in the market, and they were driven more by fundamentals and FII investments did Granger cause of India’s stock market. â? Selenium Serisoy Guerina? conducted in 2006, Study on â? The role of geography in financial and economic integration: A comparative analysis of foreign direct investment, trade and portfolio investment Flowsâ ????. . She found support for the argument that most FDI were horizontally between the industrialized countries, while most foreign direct investment in developing countries is vertical, and our results show that the investment portfolio , FDI has been very good in comparison sensitive to changes in GDP per capita, this means that if a negative result, portfolio investment is more volatile than FDI. A. Julia Priya, D. Lazar and Joseph Jeyapual in 2005 showed that about â? The role of foreign institutional investors in the development of stock markets in India ????, results showed that the DAX has influenced the market capitalization of NSE, Turnover of BSE and NIFTY without a market capitalization of Foreign Institutional Investorsâ? Suchismita Bose Dipankor coondooâ? In 2004, this study on? The impact of ????,. FII Regulation in India These results strongly suggested that the liberalization policies had the desired effect, and were either expansion, the mean level of FII inflows and / or gives the sensitivity of these flows to a change BSE and / or PAL Parthapratim the 2004 study as a right? ? the recent volatility in stock markets in India and foreign institutional investors. The results of this study suggest that foreign institutional investors has emerged as the dominant group of investors on the local stock market in India. Especially in the business, which was represented sensitivity Bombay Stock Market index, the degree of control is very highinertia flows. â? Sandhya Ananthanaryanan, Chandrasekhar Krishnamurthi and Nilajan Sen 2003 study as one? Foreign Institutional Investors and Security Returns: Evidence from Indian Stock Exchangesâ ????, They found, in line with the basic premise extension. It did not take much to find confirmation in terms of momentum and contrarian strategies employed by FIIs. It supports the hypothesis of price pressures. There was no justification for the assertion foreigner? Disrupting the market. J. and S. Umesh Pasricha. C. Singh tried in 2001 to analyze the impact of investments in the Indian capital market FIIs. The study showed that FII are here to stay and were an integral part of Indian capital market. Your entry has led to greater institutionalization of the market. They brought the transparency of market operation. SSS Kumar found in its 2001 study on the impact of FIIs can be found on the Indian stock market. The inference analysis of the document suggests that FII investments more driven by market fundamentals and not short drive or a technical perspective the market. How justified by Seethapathi K. and V. Subbulakshmi a study? Foreign investment: Need for Focus ????, They concluded that the flow must be found. The political will must be demonstrated by the government. In addition, supervisors have to determine the reasons for the failure of processing approvals to real investment, and these issues must be addressed immediately. E. Han Kim and Vijay Singal in 1997, conducted its study entitled â? Are market open to foreign investors and emerging economies? A conclusion ????, reveals how. The integration of equity markets in the new global market has had benefits and continue to have benefits for both international investors and host countries. The end result of integrated markets, better resource allocation, increase capital productivity and living standards. THEORETICAL CONSIDERATION Balance between late 1990 and mid-1991 the economy was severe payments difficulties, to get closer to default on its external payments obligations in January and June 1991. In January 1991, the government began negotiations with the International Monetary Fund (IMF) loans. This was followed by the application of conventional IMF-World Bank prescription of a short-term? Stabilizationâ ????, devaluation, the temporary compression of imports, fiscal and monetary policies of compression with an increase in interest rates, followed by a longer term? structural adjustment? Measures aimed at restructuring the national economy. The new economic policy is the result of applying the â? Structural Adjustment? Program. The â? Reformsâ economy? or? liberalizationâ economy? Program, which began to be implemented with the announcement of the New Economic Policy (NEP), have been profound changes in the field of industrial policy, trade policy and the policy of foreign investment, a redefinition of public sector’s role in the economy and the restructuring of the architecture of the internal financial system. Due to the reduction of the subject, he focuses first on the capital account liberalization. The liberalization of capital account The process of capital account liberalization in India must be seen in its wider context, because it was the reality in the national context, and characterized the economy in an international context. In response to the crisis of external debt which surfaced in 1991, the Government has initiated a process of stabilization, adjustment and reform. Economic liberalization and structural reforms aimed at increasing the openness of the economy through trade flows, investment, technology and capital flows. The trial began the introduction of convertibility on trade quantitative restrictions on imports as had been dismantled, except for consumer goods and the level of tariffs have been lowered. It has been combined with a liberalization of rules governing foreign investment and foreign technology. And restrictions on international economic transactions, including capital have been gradually reduced. This process was also influenced by the accelerating process of globalization, which has been associated with increasing economic openness of trade, investment and financial flows. The approach to the liberalization of capital movements in India is much more cautious. What is said has been liberalized. Everything else has been limited or prohibited. The contours of the liberalization of capital movements have been transformed in large part by the salutary lessons of the crisis, foreign debt in early 1991 and brought India to default, in meetings its international obligations characterized. The situation of the balance of payments, it was almost unmanageable. The vulnerability has been exacerbated by two factors: it was very difficult to take short-term debt on the role of international capital markets, and instead there was an outflow of capital in the form of withdrawals of deposits from non-Indians residents. This experience dictates the parameters of asset transfers liberalization8. This prompted a strict system of leveraged loans mainly short-term debt. It led to a systematic effort to discourage volatile capital flows associated with non-resident deposits repatriable. Perhaps more importantly, it was essential to change the emphasis and the change in preference of debt to capital flows is not responsible for the debt creating capital flows. To a certain degree of liberalization that was introduced was also influenced by the perceived needs of the economy: financing the current account deficit, mobilizing resources for investment and to attract international companies. But the convertibility of capital account, fortunately, remained in the field of rhetoric. The Mexican crisis in late 1994 was, ironically, a boon for India. It was not only an early warning sign. It has dampened the enthusiasm of those who advocate the liberalization of capital movements, with a big bang. He supported those who in the wisdom of the convertibility of capital that would have been premature in no way questioned. The contours of the liberalization of capital movements in India have been determined by these factors. In developing these contours, it is necessary to distinguish between different forms of private capital outflows and, as there are important differences between these categories in the nature and degree of liberalization. A full description would involve too much of a digression. For our purposes, suffice it to observe the contours of liberalization in the capital stock of the following categories: â? ¢ Direct â? ¢ and portfolio investment â? ¢ nonresident deposits. Foreign Direct Investment It is defined as a long term investment by a foreign investor in an enterprise resident in another economy in which the foreign investor is based. The FDI relationship consists of a parent and a foreign subsidiary, which, together, a transnational corporation (TNC). To qualify as FDI the investment must allow inspection of the parent company on its foreign partners. The liberalization policy for foreign direct investment began in July 1991 with two important decisions. First, foreign direct investment, with a maximum of 51 per cent equity was to obtain automatic approval in certain areas with a high priority only to a procedure for registration with the Reserve Bank of India. Secondly, a Board of promoting foreign investment has been established for all other proposals for approval of foreign direct investment has been limited by the parameters set in the front and procedures reviewed. In fact, it has a two-lane entries for foreign direct investment. The license was automatically according to the parameters of the Reserve Bank of India, while all other approaches have been submitted for approval by the Council to promote foreign investment. Access through the automatic route has been gradually expanded over time. Needless to add, outputs associated with foreign direct investment, no restrictions, but that was so controlled, even in the era of capital. Foreign portfolio investment (FPI) Portfolio investment represents passive holdings of securities and foreign stocks, bonds or other financial assets, none of which takes active management and control of the issuer of securities by investors where such control exists, it is known that direct foreign investment. The liberalization policy, with portfolio investments in September 1992 renewed. Initially, foreign institutional investors such as pension funds or mutual funds may have been in the domestic capital market is subject only to invest registration with the Commission Securities Exchange of India. For investment guidelines issued by the Reserve Bank of India allowed foreign institutional investors on the secondary market for equity to a height of 5pers percent (later increased to 10 per cent) for each of the institutional investors foreigners in Indian companies with a total of 24 per cent of its capital (later, 30 percent of the capital stock at the option of the company relaxed) for the total foreign institutional investment in Indian society. Foreign portfolio investment is still classified in 1. FIIs 2. ADRs / GDRs, and 3. Offshore funds. Foreign institutional investors (FIIs) He who invest their own resources or on behalf of “broad based” funds or are from companies and foreign individuals and one category may be given in the proposed registration for FII. â? Pension Fund ¢ â? ¢ Mutual Funds â? ¢ Investment Trust â? ¢ insurance or reinsurance â? ¢ Endowment Fund â? ¢ University Fund â? ¢ charitable trusts or foundations or charities to invest in their own name, and suggests â? ¢ Asset Management Companies â? Companies nominee ¢ â? ¢ Institutional Portfolio Manager â? ¢ Board of Directors â? ¢ Power of Attorney holders â? ¢ Bank Access was provided to foreign institutional investors on the secondary market for debt elimination. Shortly afterwards, the foreign institutional investors also have the possibility of investment or investment in the primary market, subject to approval by the Reserve Bank of India, with a maximum of 15pers percent of the new edition. It took some time before the foreign institutional investors could invest in government securities in primary and secondary markets. This happened in 1996-97 and was below the limit for loans to leveraged. Subsequently, in 1998-99, foreign institutional investors were also allowed to invest in treasury bills. There is no requirement for reserves established or taxes on these capital inflows. It must be said that foreign institutional investors are permitted, the repatriation of large profits, dividends, interest and any other input of the sale of these assets, without any restriction on the exchange rate market. Tax on dividends from this investment portfolio of foreign institutional investors is 20 per cent, which is well below the rate of corporate tax for domestic and foreign firms. But foreign institutional investors has been higher short-term capital gains tax of 30 per cent against 20 per cent for domestic investors, while gains in long-term capital tax equal to 10 percent. The sale of financial assets for recycling are absolutely free, provided that the transactions on the stock exchange. However, the divestitures required by another route, or any other form, the approval of the Reserve Bank of India. Global Depositary Receipt: Global Depositary Receipt negotiable certificate in the bank of a country that has acted on a number of shares of a stock on an exchange in another country. American Depositary Receipts make it easier for individuals to invest in foreign companies because of the widespread availability of price information, lower transaction costs and dividend payments on time. Even as European Depositary. The option portfolio investment is also the national legal entities in September 1992. Indian companies were allowed to convert access to international capital markets through Global Depository Receipts and Euro Convertible Bonds, the debt into equity after the prescribed period. This access is not automatic. Individual requests to comply with the general guidelines of the government were established, subject to approval. This process remains unchanged. Offshore Funds: An offshore fund is a collective investment in offshore financial center, a residence, for example, British Virgin Islands, Luxembourg, the Cayman Islands or Dublin. Similar facilities for the investment portfolio were then transferred to offshore funds, foreign Indians (as individuals) and foreign entities for investment in shares or bonds, which extend to trade on a equal footing with foreign institutional investors, but at a height of 5 percent for each non-Indians or legal entities residing abroad in an Indian company. Among the various components of the investment portfolio, R II comprises the bulk of the investment portfolio. The main objective of foreign institutional investors to minimize risk and maximize their profits by diversifying their portfolios internationally. Among the important factors for investment decisions are taken by IFI country and region specific. Portfolio flows often “hot money” flows are notoriously volatile capital. They are also responsible for the spread of financial crisis contagion in the international market. But Evan was the FIIs Folding an important role in financial markets since their entry into this country. The portfolio flows explosives FII brings with them great benefits, because they are an engine of growth, reduction of capital in many emerging countries. The opening of capital markets in emerging economies was seen as advantageous by some, while other possible negative consequences. Among the most active FIIs Stanely Morgan Asset Management, Jardine Fleming, Capital International, J. Henery Schörder are Templeton, Warburg Pinker, Internatioanl Alliance and the Quantum Fund. Foreign Institutional Investors in India India has opened its doors to foreign institutional investors in September 1992. This event is a milestone because it effectively because of globalization, its financial services sector. First, pension funds, mutual respect, investment companies, asset management companies established, companies and candidates institutional fund managers have invested directly in the Indian stock market. In 1996/97 the group has been expanded to fund the university registered, foundations, endowments, foundations and charitable property. Since FII flows which form part of foreign portfolio investment has been increasingly important in India. Contrary to 1998, net inflows are positive. Nuclear tests and East-Asian crisis did not result from slow, but listed as by Gordan and Gupta (2003), the impact of short duration. This is the percentage of net sales total of BSE, the share of the average FII purchases and sales increases of 2. 6 per cent in 1998-5. 5 per cent in 2002. The cumulative FII investments in India in August 2003, about 17400 million. In August 2003, net FII investment was 9 percent of the market capitalization of BSE, which is low compared to market size. However, in the words of Banaji (2002), not market cap that matters, but what is important, the level of free float, shares in other words that are actually available for public trading. With a floating stock in the Indian market, has less than 25 percent, were about 35 percent of float available to FIIs bags – despite the fact that they invest in only a few highly liquid stocks. While India receives only 1 per cent of FII investment in emerging markets, portfolio flows to India are less volatile compared to many other emerging markets (Gordan and Gupta, 2003). FIIs by adopting a “bottom-up approach seems to be top quality, the high investment growth, stocks with high market capitalization (Gordan and Gupta, 2003). Sytse et al. (2003) provide empirical evidence that foreign institutional investors in India, in large liquid companies with which they leave their positions quickly at relatively low cost, and also that foreign institutional owners have a greater impact than foreign companies owner if performance is measured by allowing d to invest in stock with the endpoint. India is one of the most dynamic economies in Southeast Asia and has promised to increase by over 9 per cent, would be the second largest in China, it is not surprising to see increased FII inflows into the India in the future. FIIs now it is the whole economy, with macro-economic factors also play their role in attracting foreign investors. Factors like a strong currency rose the most important reforms in the banking, energy and telecommunications, consumer and political stability will play an important role to attract FIIs in India to play. The Securities and Exchange Board of India (SEBI), in collaboration with the Institute of Chartered Accountants of India (ICAI) jointly announced the market surveillance and regulatory policy, allowing Indian companies more transparent and disciplined. After the April 2005 report on corporate governance by CLSA Emerging Markets, India in fourth place with a score of 55. 6 per cent. Banaji (2000 constraints) that reforms the capital market have been launched, such as greater market transparency, automation, paperless and regulations for reporting and disclosure standards because of the presence of ‘FIIs. However, FII flows are considered, as both cause and effect of reforms on the capital market. The reforms were initiated because of the presence of FIIs and this in turn lead to increased flows. The Indian government has granted preferential treatment to FIIs to 1999-2000 by subjecting capital gains to long term at a lower rate of 10 per cent, while domestic investors had earned the highest long-term capital gains tax . The Indo-Mauritius Double Taxation Convention 2000 Convention (DTAC), except for Mauritius based entities to pay capital gains tax in India – including taxes on income from the sale of shares. The result is an incentive for foreign investors to invest in Indian markets, with the Mauritius route. Therefore, we now see investment in Mauritius, but there was not before 2000. The country wise distribution of registered FIIs in India, majority of them come from the United States and England. Chakrabarti (2002) and Rao et al. (1999) point out that because of existing links may be the source of the FII investment is not a country where the institution operates. Nevertheless, the figure gives an idea of the country wise distribution of FIIs in India. While long-term investments in the Indian market, promote, Budget 2003 proposed that investors buy listed companies from 1 March 2003 will be exempt from paying tax on profits they make on their investments provided to keep for over a year. With so much profit is the FII investment in India is expected to grow in the future. FII Regulations Investment by FII was developed jointly by the Council of the Securities and Exchange Board of India (SEBI) by the SEBI (Foreign Institutional Investors) Regulations 1995 and the Reserve Bank of India by Regulation 5 (2 ) of the Act on Foreigners Exchange Management (FEMA) is regulated, 1999. The enactment of legislation on foreign investment market by SEBI in 1995, a watershed for FII flows to India, which has led to a significant increase in the level inflows FII equity in the period preceding the Asian crisis. Benefits Cost â?
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Finance, Credit, Investments – Economic categories. Modern interpretation of scientific theories in finance and credit, are described in terms of specifying the object of research, too many varied and graded. Has the definition of all economic relations in the process of creation, distribution and use of finances, as money sources is widespread. For example, in “the general theory of finance” There are two definitions of Finance: 1) “… finances reflect economic relations, training funds from financial sources in the process of distribution and redistribution of national income after distribution and use. This definition relates to the conditions of capitalism, as in market relationships and money to acquire a universal character, 2) “Finance is the formation of the central government decentralized sources of money, relatively economic relations with distribution and use, to meet to serve the state functions and obligations and also broadened the definition of conditions of continuous production. This definition is applicable without the context of its action. We share a part of this statement , Finance and think he should make some specifications. First, Finance overcoming the limits of the distribution and redistribution of employment of national income, even if it is a basic foundation of finance. In addition, a education problem and use the sinking fund, part of the financial sector, and not on the distribution and redistribution of national income (value of the new association in a year), but the distribution of value already highlighted. This seems at first to be part of the value of major industrial products, the latest prices for a finished product is moved (that) the value and thereafter to take account of their achievement, and they will finance depression. your source is first hand as a deepening of the consistency of finished products purchased at cost. The second major goal of finance is much broader than “exercise of governmental functions and duties and providing conditions Production is steadily improving. Finance, there are at the state level and also produced at their branch, and under such conditions, when most manufacturers are not citizens. Rodionova VM has a different position on this subject: “Education starts at the Real financial resources distribution level, if the value is achieved and concrete forms of economic value will be realized from the type of income separately. Rodionova VM was the invention of Finance, including the distribution relationship in DS Moliakov emphasizes basic industrial finance. Although the two underlying them not to discuss finances, as a system of education, distribution and use of funds from financial sources, as the following from the definition of Finance: “Financial relations d money in the process of distribution of forms and a redistribution of partial value of national wealth and the total social product is the subject of business and education and use of revenue and cost savings in production is to open more connected to physical stimulation of workers for the satisfaction of society, social and other surveys. “In the textbooks of political economy, we meet with the following definitions of Finance: ‘Finance of the socialist state to represent the monetary policy (economic) relations that help in the way of the expected distribution of income and the saving money funds Sources of State and the Socialist produces are established for ensuring the growth of production, increases the material and cultural level of people and meet other demands of society in general. ” The production system and use the means necessary to ensure payment of socialist production expanded to represent more fairly the financial position of the socialist society. And brought all economic relations between the state and product organizations, industries, regions and independent citizens, according to the flow of liquidity to financial relations. “As we have seen, not definitions of financing by financial economists are not very different. In every position he discussed are: 1) an expression of essence and appearance in the definition of Finance, 2) the definition of Finance, as the system of production and use of funds from the cash level phenomenon. 3) the distribution of finances social product, and the value of national income, the definition of planned distributions nature, the main objectives of economic and trade relations, the maintenance of which they are used. When the preposition “refuse socialist” in the definition of finances, we can say that it is still relevant. We meet with such traditional definitions of Finance, without the adjective “socialist” in the modern economic literature. We can not give such information to “represent cash to finance the production and use, including reports of money in the process of distribution of products incorporating values and economic prosperity of Education and the production of other cash and savings of Economic Affairs and the State, the rewards and satisfaction of the demands of social workers. “in this explanation of Finance as the DS, and VM Rodionov, the Moliakov Definitions meeting after the traditional heritage, we are broadening the financial base. They relate to “distribution and redistribution of the created value profitable product, the partial collapse of the value of national wealth.” This latest version is actually very relative to the process of privatization and transition to the protection of privacy and is regularly practiced in different countries, like Britain and France. “Finance – cash resources, financial resources, their origin and movement, distribution and redistribution, use and economic relations, which are due intercalculations between economic, transportation resources of cash flows cash, and use “.” Finances are the system of economic relations that are bound to a solid production, distribution and use of financial resources. “We meet with our definitions quite innovative finance to Z. Body and R. Merton ’s basic textbooks. “finance – is the science of how people related expenses, cash flow deficit and revenue in the period. The financial decisions of revenues and expenses are that 1) marked separately in time, and 2) a rule, it is impossible to examine them, before one of these decisions can not get anyone else “.” The theory is composed of financial performance figures … learning systematically issues of species distribution to implement compared to the time factor, but also takes account of quantitative models for estimating in practice and application of alternative variants of the individual financial decisions instead of “. These basic concepts and quantitative models are given for each level used for financial decisions, but in the current definition of finance, we meet with the following lessons from the financial base: the main function of finance is in meeting the wishes of the people, issues economic activities of all kinds (business sector, including government agencies) are treated by each level to perform this basic function. For purposes of this monograph, it is important to compare the well-known definitions of finance, credit and investment, to decide how and how it is possible to integrate finance, investments and loans in which part of a whole. Some researchers, part of funds of the credit if it is proposed from the position of the nature and class. The other major group shows an economic category of credit in conjunction with the economic category of Finance, with which he stressed the impossibility of the existence credit in the consistency of Finance. Kuchukova NK emphasized the independence of the category of loans and notes he sent his only “features of the movement is the value that is not subject to the divestiture options loans and the rights of owners. “Barkovsky ND responses that create the functioning of the money in an economic base for the distribution of finances and credit as a separate category and resulted in credit and financial relations. He noticed the epistemological roots of science in money and credit, that science has on the finances of the company for exploration of these economic relations, on the cash flow and credit welding. Talking about the proliferation of definitions credit. in modern publications seemed to credit “luck”, then Finance. For example, we find the following definition of credit in the economic and financial dictionary: “Credit is the credit in the form of money and property with the conditions of return, usually by paying per cent. The credit is a form of movement provides loans and economic relations between lenders and borrowers. “This is the traditional definition of credit. In the earlier Dictionary of the economy, we read: “Credit is the system of economic relations, which is formed during the transfer of money and material resources when using a rule under conditions of return and payout percentage. Given in the Manual of Political Economy, minimization VA Medvedev, the following definition: “Credit as an economic category which expresses the relationship created between the company, working group of employees in education and use of funds borrowing to cover the cost of this reference and back pay, while transferring the sources for the use of time and accumulation. The loan is discussed as follows in the previous training manuals of methodical Political Economy: “Credit is the system of monetary relations, which is created in the process of using and providing resources transiently cash budget from government, unions, manufactures, organizations and the general public . The appropriation is objective. It is essential to further develop the production of the State and other needs. Credit money differs from the character of the vote, while respecting the financing of enterprises and organizations by the State without that condition. We meet at the following definition if “the course of the economy:” Credit is an economic category, which represents relations, while the various industry organizations or persons, either transfer the money any other use for time and return conditions. credit creation through a historical process of the meeting of economic and monetary relations, the form that the money that respect. ” The researchers give slightly different definitions of credit: credit – a loan in the form of money or goods for the borrower by a creditor under the terms of the declaration and payment of a percentage of the borrower is given. Credit is the time sources of free money or product as a liability for the terms defined by the prices fixed percentage. How is a loan, the credit in the form of money or goods. Formed through the movement of the loan, a certain relationship between the creditor (the loan is granted by a legal entity of physics, gives a little money as debt) and the debtor. Combining all the above definitions, we arrive at an idea that credit should be given money for goods as a debt to certain terms and provisions of the bottom price fixed percentage. It expresses certain economic relations between the participants in the process of capital accumulation. Necessity of the credit relationship is put to one side by the perception of fixed sources of free money and passing on the other hand, the existence of applications for them. While at the same time, we have two similar terms: loans and credits to be distinguished. Loan is characterized by: ICI-discussion can affect the transfer of money and things are a side (rental) to another (the borrower): a) under the ownership of the borrower and the same time, b) the conditions to deliver the same amount or the same quantity and quality of things: • The loan money is not interested in supporting · Each person can participate. The difference is, with loans, loans which is somehow an occasion of private borrowing · one side (rental) is the second (the debtor), one silver, and _ for the use of time • It May not bear any interest (if the assignment does not work) • and its creditors, and not every person, but a bank (primarily banks). How is a loan, the bank loan. As we understand it is not fair use “credit” and “loan” as synonyms. Bank credit is the union of relations between the Bank (as creditors) and their borrowers. These relationships affect: a) the grant of a sum of money given to the borrower for a specific purpose (though we are with the so-called free credits, objectives and tasks of the credit will not be in the award name), b) the low performance c) initial percentage of the borrower for the use of sources which, in its provision. The basic principle of the credit system and its essential element is the existence of trust between both parties (in Latin “credo” which comes from the word “credit”, meaning “trust”). From the position of the forms of currency in circulation (in the abstract, a historical process of formation of economic and social policies, fiscal and banking systems, expressed by them) Comparison of different definitions of finance and credit, which seems paradoxical conclusion: the private loan is to finance. And really, from the position of the movement forms of money finances the creation process and use the cash resources. Very often, these movements are met with no return, but sometimes it is possible to create loans budget for investment projects of other needs. Even if production companies or use their money and we understand the finances of the industrial theme, such use may be considered in the production or businesses are performed (there is no problem about returning or not return) use and have free return conditions. This is a commercial form, due to the transmission source to another, but on this occasion, it is part of the financial system of production and business. In view of transactions in bank money, the main character of the loan is the process of development and uses of funds for cash under the conditions of return and, generally, where the portion of value. If the value of the tax credit does not take place (even in the few exceptions) are in line with the movement, an opportunity for private credit finance, the net financial resources (ie, from budget State) loans that do not interest be used. When the value of credit is gated by the emergence of form, credit is discussed in economic change. In a historical perspective, finance (particularly in the way of national budget appropriations () and starting with wear, and later business and banking district), has developed differently to believe credit is part of Finance. Although the genetic and historical perspective, the previous lender before loan does not require the continued collection of principal and although the net debt is the foundation. Banks need to focus analogy to the major equity influxing means for consumers and for the greatest percentage in terms of return. The accuracy (based on financial, in kind of financial funds, the loan is partly later) the bank seems to be the capital of booking (insurance) is part of the body, by nature, both financial and non-rental. Thus, despite the substantial differences between finance and credit, the genetic perspective and history, make credit appear to be composed of Finance and representing change. From the basic position to express the economic relations between finance and credit, we meet with the cardinal differences between these two categories. What is expressed primarily by the distinction of motion, even when these forms are not returned or not. Funding relationships expressed in the aspects of distribution and redistribution of social product and part of the national wealth. Distribution credit corresponding value is expressed only in the section, the percentage of loans, while being held on the loan itself, only a temporal distribution of sources of money. With this, there are many similarities between finance and credit as the fundamental point of view, so that after the movement pattern. At the same time, there is a significant difference between the so financial and credit-like in nature, in the form. After that, it must consider a kind of economic class in general, financing and credit as a unit total consideration, and the limits of the category itself, there would be separation of the specific nature of finance and credit . Financing cash flow is common to economic categories examined. It takes place in a separate system of finance and credit, hit during the analysis of the definition of finance and credit. Combination “Funding Cash (training fund)” reflects and defines the precise nature and form of the economic class of more general categories of financial and credit. While in law and in economic practice It is very unpleasant terminology, which consists of three words to use. Thus, “Delete” hardens with his influxing much information in circulation and in terms of its foundation and rigorous attention to detail. In the discussion, we consider: 1) the broad and narrow understanding of the economic category of Finance, 2) discuss finances in close conformity with the general understanding of the traditional sense, discuss 3) finances, such as funding of non-cash in broad understanding of finance concerns – in the strict sense and credit – in the fullest sense. “financing” and appropriate “education fund” will target us as the structuring of cash, the two poles – the accumulation sources of cash (collection) and its use for certain purposes in the financing and the credit used. We established a new terminal – “Financing of the sphere of investment” (FIS). Analysis on cooperation in finance and credit from us, give us a chance to prove that, in terms indicated, word “finance” with the importance of financing sources of funds are used, the target structure. In this process, we consider also the financial credit and economic investment “category. Taking the results midst of the discussion of the new term – “Financing of the investment sphere” and to discuss their investments from parts. The term “investments” in local economics made the West. In the Soviet economy, they are used for a long period on the site, “investment”, the term “internship finance, use of industry factors in the range of genuine industrial activities in achieving investment projects made. For a look in these terms is identical to his concept of “investment” so that you can use them as synonyms. Although the terms “investment” and “investment” have the advantage over the words’ capital investment plans for the linguistic and philological view because they are in a word. This is not only economical and practical in the process of collaboration with the terms “investment”, but there is the possibility of forming words. More specifically, the “investment process”, “Domain Investments” sphere of financing investments – all these terms are much more acceptable. Edit with foreign domestic economic terms is adequate if it is really important (for the parallel use of native terminal) for inheritance. Although we are not allowed to change the local economic development in foreign words together, if ordinal traditional language of private and easy to cut and process concrete evidence to explain their own terms. The “movement” is in these terms in the narrow framework of licensed professionals, but their “spit” economic science can not economically language slang hard to do. Termini’s talk – “investment” and “capital position in the economic use of the literature. Investment is the investment of funds in the fundamental interest and circulation of capital in order to always. “Investments in tangible assets – are the investment of funds in mobile and real estate (land, buildings, furniture and so on). Investments in financial assets, the investment of funds in bank accounts, securities and other financial instruments. “We do not work with the words” investment “in the dictionary previous economic challenges, although we take the Termini combined” investment policy “- the Association of Industrialists decisions, the main directions of investments to ensure the activity concentration in determining the commuter, who is on the achievement of expected rates of societal development, the production directed to the compensation and efficiency, increase production and profits in national income for each rubles lost. For now, the real definitions, that investment is only through financial support if they are limited not only financially, but also the investment of a natural material and technical notes and information resources space. Work to an existing resource in the investment process. You will even encounter a particular investment process. A positive side effect of definitions discussed is that they are) the investment policy and capital investments (investments: connect – economic development in the broad trends of concentration – the provision of strong economic growth – the increase of economic efficiency must come to expression: a) drop the installation of production and national income for each ruble lost, b) complying with the sectoral structure of investment, c) improving its technological structure, d) by further optimizing production structures. Compared to a Such definition of investment (capital investment), the definition of investment in the dictionary fixing “the economy” appears to be underdeveloped, “investment – the cost of collection and industrial production and the the increase of material resources for unforeseen expenses. In this definition, the operating costs (cost of production will be) mixed investment (capital) costs. Not even the investment expenses, but (even if the investment followed by the corresponding expenditure) is on track. It differs from the cost that the funds are (means) by returning the values of progress also fixed in terms of growth, which corresponds to the concept of capital advanced. Sponsorship can be converted into money, materials and natural forms of information. Except for the terms “investment”, there are two other conditions related to investment in its context. They are listed below. “Investment in Human Capital” – means any action, the workers rise in labor productivity (through enhancing their skills and develop their skills) is provided in costs, improve worker training, health and the increasing mobility of workers. ” It is very useful for those terms, even if correction: Investment in human capital, not only workers but also the needs of staff, representatives of each type of work. “Capital goods, capital goods — great. “In the official manuals of political economy, the time of the Reformation and its investments are discussed as” expenses for the creation of new funds and major expansion, renovation and renewal of assets. “In this definition, investments (investment capital) during the separation of forms to be limited (type) of the new production of key resources, only the most important ways (without increasing) the flow of funds and technical provisions: a) the creation of new, b) expansion, c) reconstruction, d) renewal. Furthermore, the concept seems to collect industrial costs of the expansion of core funds, the movement is provided and technical provisions. Here are the definitions of investment “during the business meeting” investments will be) as “the transfer of funds in the stock of capital (means of production, reserves, and also mentions other objects and economic processes, the question of long – influxing of materials and cash. “After the allocation of capital in the financial and physical forms, including the need to invest in materials and financial investments” are divided. distribute a vehicle investment, the purpose of building industrial and non industrial vehicles of the proposed change or developed a technology park and furniture, and other reserves. “They call themselves the total investment in the production of an investment product that is addressed) to maintain and increase the capital stock (basic and reserve funds. Total investments consist of two parts. One of them is called depreciation is an important investment to offset the expansion in pre-industrial use, wear and repair of basic resources. Part of the total investment is represented by investment income — investment in order to increase the basic means. “Depreciation should not be resources to compensate the essential means, but it is the source of such targeted financial resources. Investment in human capital is a particular type investment, particularly in education and health care. “Real investments are investments in the sectors of the economy and also, they are the types of economic activities which influxing increased real capital to ensure that the material values of industrial resources is increasing. “We can work with such a definition of a specification agreed that tangible and intangible) are a real capital (wealth, which is scientifically studied results experimental construction, various information, education workers and others, people). Service as the Games excitable, including the function of redistribution of social wealth of a private person to other (except for love. “financial assets represent investment of funds in equities, bonds, debentures, securities and other instruments. These investments are, of course, you will not be any increase in real physical capital, but they help to benefit to the detriment of the variation in prices of securities during the speculation, or of course vary in different places of sale and purchase. “We all share such a definition, which implies that financial assets (if n ‘is not followed by real investment as a result) does not increase the real wealth and real tangible and intangible assets. In this context, the term is very important: “We need investment finance, investment funds differ in the way of buying and selling securities for purposes of representation in higher profits and financial assets, money and be really moved to the real physical capital. “Separately listed in the price “economic” before the long-term investments and short. The recognition of the existence of borders between them, the authors write in short-term, “a month or more” investment. If these criteria we determined we call the investment conditions for a few months to overcome long-term ones, which is very doubtful, and we do not agree with it. A long-term nature of the Fund is an essential investment ( short term), combined with the concept of investment. Essentially it would be preferable to report promptly called compensatory compensatory mid-term and long-term investments offsetting: – less than 6 months – Quick Compensatory – called from 6 months to a year and half – half compensatory – over one and a half years – longer in lieu mentioned. We stopped in the definition of investment in working capital, “economic price” for the specific purpose, as the authors have attempted to discuss systematically the concept of investment and quite complete, hereby publish the book now. We discuss the definition of the economic category of “investments” in various publications in the next chapter. The definitions here are enough to get an idea of the level of illumination of the class specified in the economic literature. What conclusions can search for the definition of this category in the economic literature will be done, done with the exception of ideas and requirements? It is very deep, more precisely, and defines in detail the term “investment”, different definitions of the economic literature, especially in the factories on the investments made by us so far discussed, it ’s there has not opened in the nature of the investment as an economic category. In each monograph, even if they have an investment as an economic category, is only the definition, the concept of investment. But that academics Vasil Chantladze explains, “a concept is a discussion that turns into something about the specificity of the subject studied. A concept from a large key features, is one, and it is essential it’s just – the definition. “But the categories are much broader, it is” a key, the basic idea of all science. “Departments real economic theory, existed objectively productive relationships. The first category is the definition opportunities, there were signs, connections, relations between the objective world. Generally, any educational process through the categories to meet the possibilities of sharing processes and provide opportunities for semantic definitions of the term a subject and to achieve their high specificity and economic relations between the material world. Our goal is to detail the reasons for investment – as an economic category, and also as a financial category in the narrow sense. Here we apply for another manual argument advanced by academics Vasil Chantladze: “Any financial relationship is an economic category and all financial and economic in each category, but not of economic relations and economic and financial relationships with financial category.” The creation of investment It is important to take note of pages of resources, costs and revenues, as well as investment on the one hand, the final result of the production, and the other – a portion of income that are not used in this use case. One Another possibility: it is advisable to discuss investment in two aspects: as a category of reserves and flows, which accurately reflects the relationship between “investment fund” and “investment” is. As mentioned earlier, not long ago have been accepted into the renowned Soviet literature, the terms “the investment of funds” and “investment” for synonyms and worried about his investments from other sources for the production of the main body and the formation of fund turnover. We meet with this understanding of the term “investment” (here there are three distinct types of investment expenses: Investment in fixed capital Investment in housing construction and investment in reserves) in the modern economic literature, and especially at the macroeconomic level, while uses a statistical analysis of economic processes. In this particular investment opportunity is the category of the reserve. Under the terms of the investment can flow into the analysis process of industrial activity if it is necessary to protect the diversity of economic relations in the context of production sites in investment learning and education are addressed, sources, subjects and objects, which is shown on the microeconomic level. The main distinguishing characteristics of different methods of approaching the concept of “investment” aspect of the extension of this measure. it is possible or not the investment shows, regardless of the measure factor (the standard collection, the volume of capital and goods production reserves and so on). If possible, then the category is the reserve, and if not, then it is measured in the section of time and belongs to the category of flows. Thus, investment as an economic category, is a very complicated concept. It ’s acting element of the definition of laws governing the operation and regulation of the area of investment, private: In first place, resources and values of industrial activity. Registered investment can be realized as follows : 1 mobile and real estate (buildings, structures, furniture and other tangible property), 2nd source of funds targeted bank accounts, loans, shares and securities or long term, 3rd holder pursuant to the rights of the Copyright, licensing, Now-how, experience and spiritual values of others; 4, the rights to use land and other natural resources, other rights holders. Whatever forms are Collect results of capital investment. Leading Capital expenditures – regularity of the Assembly determines the volume and dynamics, in general, all investment activities. Secondly, the amount of revenue in power and dynamics of resource investments. We Here we must emphasize that the process of introducing Profit, the regularity of its foundation is not a constant expression “investment.” factors of production (including the conditions for the use of capital values) and sales (market) economy, and the process of raising capital is the condition leading and important investments in education. Although we stress again that the process of introduction and distribution of income is part investment. The transformation of the investment is the foundation for investment, which is following the circle: Resources – Capital expenditures (costs) – the capital and property – income. The practice of applying such a transformation is exactly the circle of investment) by investing activities (investment. investment, with the exception of the investment itself, the motivation and the promotion of raising capital, Relations between capital collect and submit, including any defined level of profitability of capital and the objectives of capital growth. According to the above in the definitions of investment as an economic category, sometimes, precision and clarity is not to feel some categories represent the wealth of hard enough. For example, a real prosperity is limited only by estimating material. This leads us to unevaluated resources for investment in the ‘era of societal transformation in industrial investment, including recognition of the valuable scientific research yet little affected by production, speculation objects securities and property specifications unreal in the coherence of a single sector where equalization. May, based on an analysis of the results, we have a broad definition of investment, together with key groups. The investment resources – are the values invested in the project in such or specific nature, for the benefit of always starting with the material, make cash. types of wealth are the same type of investment resources and will be divided into real money, and thus financial resources. real resources for investments affecting all types – natural resources – labor – physical resources, use and economic development is possible in the building (, equipment, vehicles and furniture, transport and communication, and so on — resources for investment (in broad understanding written for scientific research and experimental work of construction is to bring together the educational potential of the company and all sorts of useful information on all kinds of it) the entry and electronics makers. cash to cover all non-financial resources for the use of cash this way in certain conditions or in the type of investments directed. Cash (resources), turn left into the fund in case of structuring fund targeting investment destination in a particular type of schedule. According to the definition of investment resources we broad definition of investment as an economic category. investments – are the real investment, financial resources and intellectual projects, whose realization leads us to make the increase in real wealth, in machinery and forms of information. It is followed (in cash) or increase their wealth (the cost of distribution of cash ). As an economic category, investment express economic relations, the use of education and how to create an investment fund between participants investment procedures for the improvement and development of Company.