Arguments in favour of foreign investment

Arguments in favour of foreign investment The positive developmental role of domestic and foreign investment on economic growth in host countries is well documented in literature. Investment is usually directed in sectors that enjoy comparative advantage, thereby creating economies of scale and linkage effects and hence raising productivity. An important argument in favor of foreign investment is that it consists of a package of capital, technology management, and market access. For foreign investment, repayment is required only if investors make profit and when they make profit, they tend to reinvest their profit rather than remit abroad Zakaria M (2008). Reviewing the investment policies of Pakistan over the last six decades he observes that during 1950s and 1960s the private sector was the principal vehicle for industrial investment in the country and the role of the public sector was curtailed to only three industries out of 27 basic industries. By late 1960s the economy was mainly dominated by the private sector in imp ortant areas like banking, insurance, certain basic industries, and international trade in major commodities. During 1970s, government nationalized commercial banks, development financial institutions, insurance companies and ten major categories of industries. There was also acceleration in the direct investment by the public sector in new industries, ranging from the basic manufacture of steel to the production of garments and breads. After the miserable performance of the industrial sector following the nationalization process of the 1970s, a change occurred in the government’s approach toward the role of the public and private sectors. In 1980s, government decided to pursue a pattern of a mixed economy, with the private and public sector reinforcing each other. Despite various incentives, the highly regulated nature of Pakistan’s economy proved a restraint to the inflows of foreign investment. Specifically, foreign investment was discouraged by (a) significant publ ic ownership, strict industrial licensing, and price controls by the government; (b) the inefficient financial sector with mostly public ownership, directed credits, and segmented markets; and (c) a noncompetitive and distorting trade regime with import licensing, bans, and high tariffs. During 1990s government started to apply the same rules and regulations to foreign investors as to domestic investors. The requirement for government approval of foreign investment was removed with the exception of a few industries (arms and ammunition, security printing, currency and mint, high explosives, radioactive substances, and alcoholic beverages). During 2000s government based its investment policies on the principle of privatization, deregulation, fiscal incentives and liberal remittance of profits and capital. The policy is based on promoting investment in sophisticated, high-tech and export-oriented industries while almost the entire economic activity in other fields, encompassing agricu lture, services, infrastructure, social sectors, etc. have been thrown open for foreign investment with identical fiscal incentives and other facilities, including loan financing from local banks. Shahbaz and Khalid (2004) find that investment is considerably responsive to domestic saving, yield and uncertainty in Pakistan. Return on investment is an important determinant of investment in the country. Its role in investment decisions-making carries such a weight that it outweighs negative impact of increased rate of borrowing. Expectations and uncertainties play a major role in investment decisions in Pakistan. Whereas domestic saving is a major source of investment, foreign saving is not effective for investment in Pakistan. Tewolde H (2008) argues that the decision to invest resources is one of the significant drivers of the business financial system. Sound investments that implement well organized strategies are important to creating shareholders value, and must be analyzed both in proper context and sound analytical methods. Whether the decision involves committing resources to new facilities, a research and development project, marketing program, additional working capital, an acquisition, or investing in a financial instrument, an economic trade off must be made between the resources expended now and the expectation of future cash benefits to be obtained. In other words, investing is incurring costs in order to gain benefit during the estimated life of the plant assets or current assets in the future. Bandoi and Berceanu (2008), observe that investment decision is a very difficult for leaders of all firms. By its very nature, the decision affects the investment a company a long time horizon, if not forever. In the idea of adopting an investment decision we can use simple criteria or criteria based on discounting. Of the latter category, net present value criterion (NPV) is most often used. They further argue that inflation is a real fact today which can not be ignored. Their result highlight the fact that if effects of inflation are not taken into account we can do wrong analysis of capital budgeting.

Behaviorism vs. Cognitivism Essay Example | Topics and Well Written Essays - 1000 words

Behaviorism vs. Cognitivism - Essay Example The primary aim of this paper is to outline the differences between two schools of academic psychology--behaviorism and cognitivism. I will first outline and explain two experiments purporting to explain human cognition by Jean Piaget. I will then explain how behaviorist B.F. Skinner might object to this methodology. Finally, I will address some possible responses to Skinner that Piaget could use to defend the scientific integrity of his experiments. Jean Piaget is often referred to in academic psychology as a â€Å"developmental cognitivist†. A developmental psychologist is one who scientifically studies changes in human personality, thinking and perceptions over the cross of a lifetime. Piaget’s research tends to focus on the development of human children--specifically the intelligence and cognitive capacities of children. Thus he can be said to be a cognitivist, in that he seeks to discover underlying thought processes by observing behavior. In two of his main works, The Construction of Reality in the Child, and The Child’s Conception of Number, Jean Piaget sets up a series of experiments, which purport to demonstrate the differences in cognitive and intellectual processes between adults and children. In the first experiment I am going to examine, Piaget attempts to explain the ability of children to discriminate between quantities of objects. He does this by placing two lines of candy next to each other--one with the candy arranged in a line spread further apart, and one with the same amount of candy in a line placed more closely together. The children are asked to determine which line contains a greater amount of candy. The results were that â€Å"Children between 2 years, 6 months old and 3 years, 2 months old correctly discriminate the relative number of objects in two rows; between 3 years, 2 months and 4 years, 6 months they indicate a longer row with fewer objects to have "more"; after 4 years, 6 months they again discriminate co rrectly† (Piaget). Piaget concluded that children gain the capacity to discriminate between quantities of objects at 2 years, 6 months, but for whatever reason, are unable to use this ability effectively for this task between ages 3 and 4. The second example of an experiment by Piaget I would like to discuss, seeks to demonstrate how children view the relationship between space and object: The child is presented with a model, about one square meter in size, representing three mountains in relief; he is to reconstruct the different perspectives in which a little doll views them in varying positions that follow a given order...when he is asked what the doll sees from a particular position the child describes what he himself sees from his own position without taking into account the obstacles which prevent the doll from seeing the same view. When he is shown several pictures from among which he is to choose the one which corresponds to the doll’s perspective, he chooses th e one which represents his own (Piaget). This experiment shows that young children lack the capacity to understand spatial relationships, relative to an observer other than their own. The child does not attempt to envisage how a particular object might look from the perspective of the doll, but defaults back to a description from their first-person point of view. Piaget concludes that the behavior observed here could best be explained by the developmental stage the child has reached. He points out that â€Å"the egocentrism and objective relativity in question here concern only the relationships between the child and things, and nothing in sensorimotor action forces him to leave this narrow realm† (Piaget). In other words since the child has only reached the point in life where she always encounters objects in relation to herself, even if you ask questions about the relation between an object and another observer, the child will not understand. Behaviorism is a school of thou ght in psychology that can be thought of in contrast to cognitivism. Rather than observing behavior

At home Midterm - research paper Example | Topics and Well Written Essays - 1000 words

At home Midterm - - Research Paper Example But plasma level was significantly lowered only in the group treated with 4 cups of green tea per day and the mean drop of plasma cholesterol was 17.2%. Findings of this study confirm the therapeutic effect of green tea on lowering cholesterol. Health benefits of green tea have been extensively studied in animal experiments and in some human longitudinal and experimental trials specially using healthy individuals. These health benefits believed to be occurred due to high levels of polypenoles in green tea (Kuriyama et al, 2006). Scientists suggest green tea can be a one reason for low incidents of cardio vascular disease and cancer among Japanese and Chinese. Kuriyama et al (2006) carried out an 11-year follow-up study to identify effect of green tea on cardiovascular disease, cancer, and all causes of death in Japan. This study recruited 40530 Japanese adults of age 40- 79 years. Their green tea consumption and cause of death were recorded. During the follow-up 4209 participants died and 892 deaths caused by CVD while 1134 deaths caused by cancer. Statistical analysis showed death from CVD was significantly lower among the participants who consumed 3 or more cups of green tea daily than who consumed lower amounts after adjusting for age and sex. However no protective effect was found against the cancer. Another double blind experimental trial was carried out by Nagao et al in 2005. In this study experimental group was given 690 mg/d containing green tea extract verses 22 mg/d catchechins containing oolong tea for the control group for 12 weeks after two-week specific diet. Their body weights, BMI, waist circumference, body fat mass, subcutaneous fat area and malondialdehyde-modified LDL were measured at the beginning and the end of the experiment. The group treated with green tea extract showed a significant reduction in body fat and malondialdehyde-modified LDL than that of the oolong tea group. A placebo controlled