International movement of capital: concept and economic essence

Formation of the world economy at the turn of the XIX-XX centuries. Has created the possibility of expanding international economic relations, which raised the issue of international mobility of factors of production. The most mobile is capital, although, as a rule, its movement is subject to more strict regulation by the state. The world movement of capital under present conditions serves as a factor in strengthening the internationalization of production, increasing economic growth and employment, developing advanced industries, and turning financial markets into the most important stimulus for the development of the world economy.

The study of the impact of capital migration is relevant because the rapid growth in international trade, international interbank loans, intergovernmental loans and operations in stock and currency exchanges around the world in recent decades has been accompanied by the rapid development of the international capital market.

The international movement of capital has a huge impact on the world economy. This is manifested, first of all, in the fact that the international transfer of capital contributes to the growth of the world economy. This is due to the fact that a country provided with capital or capital-intensive goods can establish production abroad by investment. Get a greater economic effect than as a result of foreign trade. This is due to the fact that in the country that receives capital, there may be cheaper labor, raw materials or a more favorable investment climate, such as the availability of free economic zones or low environmental standards.

One of the characteristic phenomena of the modern world economy is the increase in the scale of migration of capital between countries. The international capital market is an important element of the economy, ensuring the movement of financial resources. Moving the factors of production from countries that are excessively endowed with relatively inexpensive factors of production to countries where they are relatively scarce and expensive leads to an equalization of prices for the factors of production, that is, to the welfare of the countries participating in this exchange.

The international capital movement takes a leading place in international economic relations, has a huge impact on the world economy:

Contributes to the growth of the world economy;

Deepens the international division of labor and international cooperation;

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, state, as well as international financial organizations (World Bank, International Monetary Fund).

In the modern world, all types of goods, as well as creating and improving all types of production factors, are beyond the power of any, even the most developed country. The world economy is the mechanism that can ensure an effective exchange of goods and factors of production for the achievement of the necessary goals in the interests of all countries.

Historically, the first form of international cooperation was international trade. In the further economic ties between the countries developed, and the world market began to trade not only goods and services, but also capital. Expansion of capital was originally directed by industrialized countries to economically less developed countries, including colonies. But gradually the migration processes of capital grew, and now almost every country is both an exporter and importer of capital. Since the second half of the XX century, the export of capital has been growing steadily. Export of capital outstrips the growth rates of both commodity exports and GDP of industrially developed countries. Today we can talk about the existence of a developed international capital market, which is one of the main driving forces of the globalization of the world economy.

The world 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 market of money, transactions are carried out for the purchase and sale of financial assets (currencies, loans, loans, securities) with maturities of up to one year. The money market is designed to meet the current (short-term) need of market participants in loans and loans for the purchase of goods and payment 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 oriented to longer-term projects with a one-year implementation period.

Participants of the international capital market are commercial banks, nonbank financial organizations, central banks, private corporations, government agencies, and also some private individuals.

International trade in goods and the international movement of factors of production, or resources, are in a certain interaction. They can complement or replace each other. For example, a country with a shortage of labor can overcome it not only by importing labor-intensive goods, but also by migrating labor from other countries where labor is an excess factor.

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