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Essay / Research Paper Abstract
This 4 page paper is written in two parts. The first part considers the extent to which capital generated in the developed world finds it way into less developed economies with consideration given to how it takes place and the degree to which it occurs. The bibliography cites 6 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TElessdevcap.doc
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Unformatted sample text from the term paper:
developed and emerging markets though investment and as a result of the development of the global market. The potential for this to occur can be seen in a number of
ways; capital movements may occur through tools such as foreign direct investment where companies seek to gain the comparative advantages associated with environment where there are lower costs associated with
inputs. Direct investment will also provide a way that capital can move from the developed to the developing world, where investors in the developing world are looking for emerging markets
in which to invest, where there is the potential for growth may also attract international funds into the developing countries. The difficulty with many of these investments is the
potential benefits that they may provide, while there is the potential for there to be some local benefit, much of the economic benefit will return to the investor and the
developed country resulting in disproportionate benefit for the developing country. The Moran model of FDI benefiting developing nations is the most positive. Moran (1998) puts forward two models they are
both based on economic measures. The positive model sees increased income and economic growth, the negative model looks at the way it
is possible that FDI may distort a local economy. The positive economic development model is put forward as able to help a developing country break out of a pattern of
underdevelopment; the economic benefit is the start of the positive cycle that should then be seen to emerge throughout all of the society (Levine and Renelt, 1992).The main difficulties of
developing nations are seen as low wages and low levels of productivity, which also result in low savings that cannot be used in the financial cycles for investment and development
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