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The article analyzes the investment-saving balance in developed and developing countries and groups of countries. Main determinants of investment and saving decisions of different economic agents are derived from well-known theoretic papers. The analysis of pre-crisis investment-saving balance is performed with a focus on specific role of USA and China in the global financial intermediation system. A crisis shift in US households saving behavior is revealed, and it is treated as an additional source of financing American deficits. Maintenance of high personal saving rate of US households is considered to be the key factor to support post-crisis growth.

Latest research about globalisation and its consequences on economic development and innovation. Based at the LSE department of Geography & Environment

Latest research about globalisation and its consequences on economic development and innovation. Based at the LSE department of Geography & Environment

The objective of this paper is to describe a valuation decision model for a firm in a multi -country environment. The paper extends the works of Myers, Myers and Pogue and Lev to include individual investment project decisions to the global marketplace. The model integrates the buy or builds decision, the location of production, distribution decision and tax effects into the capital investment decision of the firm. The model shows that a firm's production decision (buy or build), the customer location and tax effects are interdependent. The model to optimize the value of the firm is a function of the interdependencies of the input and financing factors. This will require significant modification of the traditional theories used for the determination of a firm's capital structure and cost of capital. This implies the current methodology used to learn finance needs to be modified. The paper also briefly discusses its implications on government policy for the economy and the firm.

Many countries are convinced that Foreign Direct Investment (FDI) should be an important component of their growth strategy. To encourage FDI, they have improved their business climates, developed various guarantees for investors, and offered incentives. In the real world, Investment Promotion Intermediaries (IPIs) face tight budget and human resource constraints. Allocating scarce resources among the various possible activities is a major component of developing an effective promotion strategy. Research, including that covered in this report, suggests that many IPIs are failing to devote enough attention to the most basic-and least costly-promotion function, one that, if it fails, undermines all other promotion activities. Provision of services to potential investors-and particularly the provision of information-is basic to all promotion. Image-building efforts can be hugely expensive. Similarly, targeted missions and personal selling are costly in terms of both time and effort. FDI offers the prospects of growth and jobs to host countries, but attracting it requires a good deal of effort. Effective investment promotion is not only less costly than adding on more incentives for investors; reform and incentives are unlikely to accomplish their goals without promotion. Promotion efforts will, however, fail to attract desired investment if IPIs are not skilled at the most basic function: collecting and providing to potential investors relevant and timely information. Ensuring that this function works well should be the top priority in the promotion strategy and in the development of management systems.