Investment environment: Difference between revisions
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[[Category: Economics]] | [[Category: Economics]] | ||
'''Investment [[environment]]''' | '''[[Investment]] [[environment]]''' is combination of all external conditions that may influence and limit investment activities and the profits derived from them considered from the investor's point of view. It can be also defined as the all external circumstances that may affect the flow of capital and increase in its value looking from investment capital side. | ||
These '''conditions''' are such elements as political factors, financial policy, basic infrastructure, socio-economic conditions, natural resources and the physical environment related to [[investments]] and which are within some spatial-temporal framework. A spatial scale [[needs]] to be specified if we want to explore the investment environment. It can be considered in different scales - depending on the scale chosen other factors of the environment are examined. For example, when it comes to the national scale instance, political, economic, financial, and law factors will be most crucial. The final result of the investment [[project]] can be affected by all main and secondary elements. Main and second-rate elements are different depending on the investment [[plan]] or purpose (H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403-404). "Traditional investment environment [[evaluation]] focuses on macro factors, factors such as [[government]] stability, restrictions, and red tape"(H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403). | These '''conditions''' are such elements as political factors, financial policy, basic infrastructure, socio-economic conditions, natural resources and the physical environment related to [[investments]] and which are within some spatial-temporal framework. A spatial scale [[needs]] to be specified if we want to explore the investment environment. It can be considered in different scales - depending on the scale chosen other factors of the environment are examined. For example, when it comes to the national scale instance, political, economic, financial, and law factors will be most crucial. The final result of the investment [[project]] can be affected by all main and secondary elements. Main and second-rate elements are different depending on the investment [[plan]] or purpose (H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403-404). "Traditional investment environment [[evaluation]] focuses on macro factors, factors such as [[government]] stability, restrictions, and red tape"(H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403). | ||
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==Aspects of investment environment== | ==Aspects of investment environment== | ||
'''Three aspects of investment [[environment]]''' deserve to be studied in investment environment research | '''Three aspects of investment [[environment]]''' deserve to be studied in investment environment research | ||
* Investment environment rating- this assessment is based on analyzing the impact of various elements on the investment environment. From the investors' point of view, this type of assessment is important because it allows you to create a clear investment area that makes investment decisions more solid. Any other way, local decision-makers can use this type of assessment to focus on the factors of their environment to develop them and attract investments. | * Investment environment rating - this assessment is based on analyzing the impact of various elements on the investment environment. From the investors' point of view, this type of assessment is important because it allows you to create a clear investment area that makes investment decisions more solid. Any other way, local decision-makers can use this type of assessment to focus on the factors of their environment to develop them and attract investments. | ||
* Investment environment prediction | * Investment environment prediction | ||
* Investment environment betterment (H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403). | * Investment environment betterment (H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403). | ||
{{infobox5|list1={{i5link|a=[[Factors affecting business]]}} — {{i5link|a=[[STEEPLE analysis]]}} — {{i5link|a=[[External analysis]]}} — {{i5link|a=[[PEST analysis]]}} — {{i5link|a=[[Emerging market economy]]}} — {{i5link|a=[[Macro environment analysis]]}} — {{i5link|a=[[Country basket]]}} — {{i5link|a=[[STEEP analysis]]}} — {{i5link|a=[[Strategic planning tools]]}} }} | |||
==References== | ==References== | ||
* Berishvili K., Shengelia T.(2014), [https://www.iises.net/download/Soubory/soubory-puvodni/pp-81-87_ijossV3N2.pdf ''The Role of Institutional Reforms in the improvement of the Georgian Investment Environment''], "International Journal of Social Sciences Vol.3" | * Berishvili K., Shengelia T.(2014), [https://www.iises.net/download/Soubory/soubory-puvodni/pp-81-87_ijossV3N2.pdf ''The Role of Institutional Reforms in the improvement of the Georgian Investment Environment''], "International Journal of Social Sciences Vol.3" | ||
* Cawood F.T. (2011), [http://www.scielo.org.za/pdf/jsaimm/v111n7/a06v111n7.pdf ''Threats to the South African minerals | * Cawood F.T. (2011), [http://www.scielo.org.za/pdf/jsaimm/v111n7/a06v111n7.pdf ''Threats to the South African minerals sector-an independent view on the investment environment for mining'', The Journal of The Southern African Institute of Mining and Metallurgy | ||
* Chen-min L., Wei-guo Z., Leslie L.(2007), ''Business And Investment Environment In Taiwan And Mainland China, The: A Focus On The It And High-tech Electronic Industries'', World Scientific, Singapore | * Chen-min L., Wei-guo Z., Leslie L.(2007), ''Business And Investment Environment In Taiwan And Mainland China, The: A Focus On The It And High-tech Electronic Industries'', World Scientific, Singapore | ||
* Fung H., Low S., Yau J. (2010), ''Socially Responsible Investment in a Global Environment'', Edward Elgar Publishing, Massachusetts | * Fung H., Low S., Yau J. (2010), ''Socially Responsible Investment in a Global Environment'', Edward Elgar Publishing, Massachusetts | ||
* Lin H., Wan Q., Li X., Chen J., Kong Y. (1997),[http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.460.8260&rep=rep1&type=pdf ''GIS-based multicriteria evaluation for investment environment''], "Environment and [[Planning]] B: Planning and Design", 1997, vol. 24, p. 403-41 | * Lin H., Wan Q., Li X., Chen J., Kong Y. (1997),[http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.460.8260&rep=rep1&type=pdf ''GIS-based multicriteria evaluation for investment environment''], "Environment and [[Planning]] B: Planning and Design", 1997, vol. 24, p. 403-41 | ||
* Li Y., Chen J., Deng S. (1997), [http://www.paper.edu.cn/scholar/showpdf/NUj2IN5IMTD0kxeQh ''Evaluating | * Li Y., Chen J., Deng S. (1997), [http://www.paper.edu.cn/scholar/showpdf/NUj2IN5IMTD0kxeQh ''Evaluating foreign investment environment in China: A systematic approach''], "European Journal of [[Operational research|Operational Research]]", p. 16-26 | ||
{{a|Gabriela Jopek}} | {{a|Gabriela Jopek}} | ||
Latest revision as of 00:20, 18 November 2023
Investment environment is combination of all external conditions that may influence and limit investment activities and the profits derived from them considered from the investor's point of view. It can be also defined as the all external circumstances that may affect the flow of capital and increase in its value looking from investment capital side.
These conditions are such elements as political factors, financial policy, basic infrastructure, socio-economic conditions, natural resources and the physical environment related to investments and which are within some spatial-temporal framework. A spatial scale needs to be specified if we want to explore the investment environment. It can be considered in different scales - depending on the scale chosen other factors of the environment are examined. For example, when it comes to the national scale instance, political, economic, financial, and law factors will be most crucial. The final result of the investment project can be affected by all main and secondary elements. Main and second-rate elements are different depending on the investment plan or purpose (H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403-404). "Traditional investment environment evaluation focuses on macro factors, factors such as government stability, restrictions, and red tape"(H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403).
An example of a thriving, international investment environment is an environment in Mainland China. Great influence on that was made generally by the political situation on the globe as well as the political situation in China (government put pressure on developing this environment and opening up for other nationalities). "Furthermore, Mainland China's participation in the WTO will facilitate further system reforms and structural adjustment in the country. This, too, will encourage foreign investors to put their capital in Mainland China" (H. Chen-min, Z. Wei-guo, L. Leslie 2007, p. 178)
Aspects of investment environment
Three aspects of investment environment deserve to be studied in investment environment research
- Investment environment rating - this assessment is based on analyzing the impact of various elements on the investment environment. From the investors' point of view, this type of assessment is important because it allows you to create a clear investment area that makes investment decisions more solid. Any other way, local decision-makers can use this type of assessment to focus on the factors of their environment to develop them and attract investments.
- Investment environment prediction
- Investment environment betterment (H. Lin, Q. Wan, Li X., J. Chen, Y. Kong 1997, p.403).
| Investment environment — recommended articles |
| Factors affecting business — STEEPLE analysis — External analysis — PEST analysis — Emerging market economy — Macro environment analysis — Country basket — STEEP analysis — Strategic planning tools |
References
- Berishvili K., Shengelia T.(2014), The Role of Institutional Reforms in the improvement of the Georgian Investment Environment, "International Journal of Social Sciences Vol.3"
- Cawood F.T. (2011), [http://www.scielo.org.za/pdf/jsaimm/v111n7/a06v111n7.pdf Threats to the South African minerals sector-an independent view on the investment environment for mining, The Journal of The Southern African Institute of Mining and Metallurgy
- Chen-min L., Wei-guo Z., Leslie L.(2007), Business And Investment Environment In Taiwan And Mainland China, The: A Focus On The It And High-tech Electronic Industries, World Scientific, Singapore
- Fung H., Low S., Yau J. (2010), Socially Responsible Investment in a Global Environment, Edward Elgar Publishing, Massachusetts
- Lin H., Wan Q., Li X., Chen J., Kong Y. (1997),GIS-based multicriteria evaluation for investment environment, "Environment and Planning B: Planning and Design", 1997, vol. 24, p. 403-41
- Li Y., Chen J., Deng S. (1997), Evaluating foreign investment environment in China: A systematic approach, "European Journal of Operational Research", p. 16-26
Author: Gabriela Jopek
