Balance of Payments Problems from Direct Foreign Investment

H. Peter Gray

Chapter Chapter VI in The Economics of Business Investment Abroad, 1972, pp 167-194 from Palgrave Macmillan

Abstract: Abstract The acquisition of real foreign assets by citizens of the investing nation will exchange the national currency for foreign currencies. In this way the process involves the whole national economic unit in the need either to generate a positive rate of international saving or to permit a reduction in the nation’s international liquid asset position. When liquid assets have eventually been reduced to some minimum acceptable level, the establishment or the expansion of a foreign subsidiary makes international saving mandatory. The intricacies of the international transfer process and the strains and costs that balance-of-payments considerations can impose upon the residents of the investing country are sufficiently important to warrant a chapter to themselves.

Keywords: Direct Foreign Investment; Foreign Investment; Direct Investment; Foreign Currency; Foreign Asset (search for similar items in EconPapers)
Date: 1972
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-01687-7_6

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DOI: 10.1007/978-1-349-01687-7_6

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