Does too much government investment retard economic development of a country?

Article Abstract:

Increased government investment results to increased steady-state output levels when the economy is underdeveloped. However, when the economy is developed, increased government investment is met with a corresponding decrease in the steady-state output. This indicates that either economic retardation or growth can be spurred by increased government expenditures. A country's steady-state output reacts, positively or negatively, according to the economic environment wherein such government investments take effect.

Expenditures-State & Local Govt, Public investments, Government spending policy, Public expenditures

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Foreign investment location in less developed countries: a theoretical framework

Article Abstract:

There are several models of foreign direct investment in developing countries. The models hold that a firm's foreign investment decision is influenced by production efficiency, technology transfer costs and net cost/benefit. Meanwhile, internalization theory considers additional factors such as macro- and micro-economic policies of host countries and differences in production environment. A model which considers profit expansion, cost reduction and foreign investment timing is developed and validated.

Models

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Foreign direct investment and industry structure

Article Abstract:

The effects of tax incentives given to foreign investors on the structure of a domestic industry of a developing country are investigated. Using a general framework of differentiated oligopoly framework, the investigation finds that total output and price index are directly and inversely related, respectively, to the size of tax relief granted by the host government. If income is unchanged, consumers benefit. Otherwise, the impact on social welfare is ambiguous.

Administration of General Economic Programs, Foreign Investment Regulations, Corporate Taxes-Savings Incentives, Industrial organization, Foreign investment laws, Tax incentives

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