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Term paper 3

Term paper 3. Trade and investment. Valuation. M are valued usually at CIF ( Cost Insurance Freight) X are recorded FOB (Free on Board) => M value higher than X value by the value of freight and insurance. Trade classifications. SITC = Standard International Trade Classification

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Term paper 3

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  1. Term paper 3 Trade and investment

  2. Valuation M are valued usually at CIF (Cost Insurance Freight) X are recorded FOB (Free on Board) => M value higher than X value by the value of freight and insurance.

  3. Trade classifications SITC = Standard International Trade Classification HS = Harmonized System

  4. FDI definitions • IMF BoP Manual (5thed 1993) and OECD Benchmark Definition of FDI (3rd ed) 1996: “the category of international investment that reflects the objective of obtaining a lasting interest by a resident entity in one economy in an enterprise resident in another economy...”

  5. Components of FDI Flows and Stocks * Equity capital * Reinvested earnings: in addition to equity capital * Intercompany loans: loans extended by the paternal company to the affiliate

  6. Measurement Approval vs. disbursements data – two sides of the FDI coin Gross and net measures Directional principle

  7. Assignment 27 September 2010: Trade and investment Provide an overview and brief analysis of developments in international trade and investment flows over the last decade in [country: XXX

  8. Trade: Limitation: Merchandise trade (excluding trade in services) Main indicators: * Total XM values (trade balance) * Composition of trade * Major regional groups/countries: source (M)/destination (X)

  9. FDI: Limitation: Inward foreign direct investment (FDI) excluding outward FDI and foreign portfolio investments (FPI)/foreign indirect investment (FII). Main indicators: Total size (approved/disbursed/BoP-concept) Sectors (broad sectors, ISIC) Source countries Sectors/source countries

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