This has in turn helped in the economy’s development and growth. This paper will thus focus on the importance of insurance and the insurance companies. And how they have not only fostered the economy’s development, but has also accelerated its growth. Insurance is a risk transfer mechanism, where the burdens of an individual
It gradually becomes a national trait aligned with cheaper labor force that attracts the developed countries. In other words, the developed countries are willing to progress manufacturing outsourcing in China. Moreover, market demand boosts in the stage of economic development, therefore, there are massive amount of potential opportunities occurring in the market place. With increasing amount of the FDI, China is constantly absorbing knowledge and learning skills from innovative technologies and trying to help local business development. As a result, the GDP is rapidly growing since 1995 (World Bank Data 2017), which indicates that the purchasing power of customers is sharply boosting in the domestic market.
As defined by Filipovic (2005) privatization is a process of reallocating public assets and functions to the private sector. According to Lopez-Calva and Sheshinski (2003), the number of privatization transactions, both in developed and developing countries has been increasing over the years. Privatization programs implemented in a country aim to: achieve higher allocative and productive efficiency; strengthen the role of the private sector in the economy; improve the public sector’s financial health; and to free resources for allocation in other areas of government activity (Lopez-Calva and Sheshinski, 2003). Selling of state-owned enterprises to private investors has been one of the most common methods of privatization (Filipovic, 2005). Several scholars argued that privatization caters the increase in government’s revenues and strengthens the incentives in maximizing the profits which can lead to productive and allocative efficiency (Guriev and Megginson, 2006).
Profitability is the organization’s ability to generate profit from it resources. Company profitability is a key attraction for investors that would increase demand on company share and consequently increase the company share price. Profitability can be measured by return on assets “ROA”, return on equity “ROE” and net profit margin ‘Assessment of the profitability of a company is made on the basis of financial profitability ratios. The ratios measure economic effectiveness” (Rutkowska-Ziarko, 2014). ROA, is a financial ration that shows the company ability to generate profit out the used asset.
The rich may choose to spend,give away, invest or save their money. Basically, the rich contributes the larger portion of resources to investment activities and technological improvements which lead to economic growth(Andriuskevicius, Ciegis&Dilius, 2017). The high-income households use their accumulate savings to actively take part in investment activities such as investment in capital stock and private equity. These investment activities increase the business growth and thus require more labor input and effort to produce higher gross domestic product (GDP). Indirectly, the rich also provides additional job opportunities for the middle and low-income households.
Authors adds threshold values of total credit to the private sector and deposit money bank assets, above which the total effect of remittance on growth is positive. Azam and khan (2011) Running the linear regression of two remittance receiving and same features countries i.e. Azerbaijan and Arminia. They empirically proves that workers remittance are significant for the acceleration of growth in the field of study. Recommending to formulate the policies and encouraging to utilize more efficiently in order to improve society living standard.
This would mean transforming from their present position where they simply operate in the money market into a deeper involvement in the country’s overall financial infrastructure. The discount houses would be transformed into an unquestionable pathway through which monetary policy actions can be carried out and also contribute to the overall growth of the financial sector. The viability of discount houses on the long run would depend on their capability to obtain plausible money market based products that would exceed what banks can provide. This kind of venture would be profitable with the involvement of treasury securities-based products and the liquidity profile of discount houses. Having High Net worth Individuals (HNI’s) and corporate organizations invest in treasury securities backed instruments could dictate impending survival of discount houses.
The developing countries have achieved this progress by reforming their policies, institutions, and infrastructure. The existing market structure, the market potential and the expected increasing returns are the leading criteria for firms for investment. With the growing global competition, the world economy provides a large source of supply and demand, so that international trade increases the possibilities for an adequate through specialization and complementary strategies. Economies of location can be seen as a prominent factor in globalization of industries. The transnational co-operations (TNC) are important market players in world trading system.
Strengths A main strength of the research is that the results have direct application in the corporate world by finance managers. Results can help financial manages better decode on the optimal capital structure of a firm to increase shareholder value. In addition, the research has the potential to highlight key determinants of capital structure unique to the GCC. This will add to the financial literature regarding to the research area. Weaknesses There are several potential weaknesses of the proposed research.
Foreign direct investment (FDI) include foreign ownership of productive assets, such as textile factories, mines and land. Due to increasing foreign investment one country can compete an international level and hence FDI is a important measure of increasing globalization. Any shape of Investment brings a progressive outcome in an economy, May on national level or international level. Now a day’s foreign direct investment (FDI) is very important part of international economics. IN case of Pakistan where markets and economy are developing so in this case Pakistan is much need of foreign investment.