Ways of turning cash means into investments. Sources belonged to he investments within the objects of non-residential and nonindustrial spheres, mostly return out within the initial shape of cash means. Turning of these final into the investments should be provided in different ways. The easiest method takes location within the case, when non-residential subject manages and owns definite means, uses them for widening and improvement of production and also for creation of nonindustrial objects. Within the resembling kind savings of those persons, which begin activities with own savings turn into investments.
Though, in other cases turning savings into investments is a difficult process. The fact is, that most component regarding the population has no opportunity to give investments straight into the production, due to the fact that for this they should have manners of enterprise administration, and of course, own definite minimal quantity for this or those reasons. Component regarding the enterprise profit also does not turn into the investments. Herewith, shape one side, population and some enterprises own free cash sources, from another, many enterprises need more means for their investment program realization. Transmission of sources is realized by the channels of financial market, where owners of cash means appear to be the distributors of investment capital, and those persons, who influx sources consumers.
Simple channels for transmission of cash means from distributors to consumers. Depending on how transmission of cash means is realized from distributor to the consumers, we can spot out 3 simple channels at the financial market. First is the market of banking credits. Banks accumulate temporarily free cash means regarding the juridical and physical persons. Of course, they pay definite percents at the influxed sources and later release credits to the borrowers to those ones, who give real investments for high percent.
Thus, process of money movement from the owner, to the borrower is realized with the help of a bank. In many cases such method of transmission regarding the cash means answers to the interests regarding the cash owner. Though this final takes too little percent from the bank, but thus he or she avoids the risk of not returning of money from the borrower. Except security, banking deposits are high liquidate, as the depositor can take own quantity out and also investment of cash means is reachable even for the smallest depositors owners regarding the savings. Bank pays very little percent to the depositors comparing with those it takes from the borrowers, that is howcome it is natural, that the distributor has a desire to invest capital exactly into the relation with these borrowers.
As to the capital consumers borrowers, it is advantage for them to obtain in direct touch with distributors. The fact is that getting banking credit is often followed by best difficulties. For example, often the bank does not lend credit within the term, that is wanted by the borrower; the bank shall not have total quantity requested by the borrower, for realization regarding the large-scale projects and so on. All these lead us to the large-scaled realization of attracting free cash sources together with the banking credit by capital consumers in other method by emission of securities. Somehow this method answers the interests of distributor of investment resources and their consumers.
Distributors of resources owners of savings often are can invest their sources in relatively advantage conditions, then banking deposits are and for detailed period of time. Barely simple procedure of placement of sources is realized within the method of selling and purchasing of securities. Also, if securities are characterized by barely high position of liquidity, then the investor can invest wasted sources by selling own securities if necessary. From the spot of investment resources consumers' view emission of securities has priority relatively to the banking credits. Hey capital consumers are provided opportunity to influx cash sources from very many of distributors of capital and accumulate large no.
Also, sources should be influxed for long period of time, sometimes for indefinite terms, if the affair touches upon securities. Thus, market of banking credits and market of securities within the technological conditions appear to be compulsory rings for investment processes, simple areas, with the help of which savings are turned into investments and are used for development regarding the production. As spoke about above, depending at objects of capital investments they separate real, financial and intellectual investments drought 5. Below real investments they mean placement of sources capital into creation of real assets as of material, so immaterial ones, which are in touch with the realization of operative activities of economical subjects, salvation of their social-economical problems. Below financial investments they mean placement of capital into different financial instruments, within first location into the securities.
Financial investments neither have speculative character, or are oriented towards long-termed investments. They recognize to be the shape of financial investment placements of sources into shares and securities, also into the loan banking deposits. Financial investment oriented towards long-termed placements of sources is related with strategic goals of participation within the management regarding the investor's object, in which the capital is invested. Concepts of real and financial investments are in close touch with the ones of real and fictive capital. Within the economical literature they usually mean securities below fictive capital.
Real capital is placed into production and securities give for the title of property, which represent this capital. Financial capital is the capital which exists within the face of securities, bring profit to the owners. Different from real capital, that is placed into different fields regarding the industry, fictive one has no inner price and is not regarded to be real wealth, that is howcome it has no function within the process of capitalist distant production. and, regarding to this, we should pay attention to the following: for every separate owner securities fictive capital represent valuable, which brings to him absolutely real income. Though, from the spot corporate capital securities do not represent real prosperity.
Growth or reduction regarding the price of functioning securities within the society shall take location independently from real capital. Regarding to this, securities appear to be a fictive capital. Real capital regarding the society is grown at the expense of investments into the real assets, while fictive capital should be increased without financial investments, at the expense of course price regarding the securities emitted earlier. A significant example regarding the process of fictive capital growth is process of emission regarding the so-called produced securities. Here they don's take into account real investments, but they release rights for purchasing securities already produced or emitted earlier.
In this case financial investments are followed by the growth of real capital regarding the society. Though, to our mind, this subject is not so easy, as it seems. The fact is that growth regarding the share course is realized not itself, but by the fact that the effectiveness of creating use of real capital is growing. The growth of course price regarding the enterprise shares expresses the fact, that the market sends too high estimation regarding the provided enterprise. Herewith, we can make a conclusion, that fictive capital is not an unique wealth; it sends marketing estimation of real capital regarding the society in every provided period of time.
Imagine that we have 3 enterprises with absolutely identical real assets, though one enterprise uses these assets better and works more effectively. It is evident, that course price regarding the shares of this enterprise is higher, then those of other ones. That is howcome fictive capital is being grown not itself, but expresses the position of real capital. Volume of fictive capital is nothing but the marketing price regarding the real capital, the title of that is fictive capital regarded to be. Herewith it is difficult to agree with, that fictive capital acts no function within the process of capital distant production.
Securities a fictive capital play important role within the process of distant production while turning regarding the savings into investments. A fictive capital securities creates income for its owners. Exactly the desire of creating profit creates the owners regarding the savings to invest sources into securities. Amounts gathered by the issuerare used for creation and purchasing regarding the real assets, accordingly the growth regarding the volume of production takes place. Movement of financial investments reminds us the movement of loan capital.
Marx showed us, within the process of movement of loan capital one and similar capital quantity appears within the degree of capital-owner and capital-function. Income regarding the functional capitalist is divided into 3 components into the loan percent and the income regarding the clerk. Below the conditions of weak development regarding the joint-stock business free capital was place into the production within the shape of loan capital. Real investments within the production are realized at the expense of own and loan capital from the functioning capitalists. By realization regarding the joint-stock shape regarding the enterprise the character regarding the investment process is essentially changed.
In this case, they mean the joint-stock business shall realize real investments at the expense of own sources indivisible profit or at the expense of banking credits. So, that they do not apply for the financial investments. Though, it is different within the case of joint-stock company. While foundation regarding the joint-stock business the founders are enter property, cash means, and intellectual property into the initial capital. Every deposit is estimated within the cash shape and every founder purchases a definite product of shares for appropriate share, that is entered into the initial capital regarding the society.
of one and similar investments turns into real or financial investments. the process of real capital growth is followed by the growth of fictive capital. Herewith, in this case real investments can not be realized without share emission, i. without financial investments. Within the case of growing initial capital regarding the joint-stock business emission of new shares is receiving place, then it is followed by real investments.
Thus, financial investments are regarded to be compulsory attributes for the investment process. Real investments are impossible without financial ones. Real investments take completed face by realization of financial investments. Widening regarding the production should be realized, also by the borrowed sources, which are influxed with the help of emission regarding the loan securities. Consequently, even in this case the process of real investments is realized with the help of financial investments.
We have different situation, when we apply for secondary market regarding the securities. If the investors purchase shares for already activated enterprise, then sources wasted for purchasing shares already are investments. But these sources get to the previous owner regarding the shares that is howcome growth regarding the real capital regarding the enterprise does not take place. It is similar to with the purchasing of securities of any kind at the secondary market. In this case if the course of securities are not grown the growth of fictive capital regarding the society does not take place.
Only the distribution of fictive capital between the members of society takes place. Thus, financial investments, which are realized within the forms of purchasing securities at the secondary market, are regarded to be relatively independent shape and it is not directly related with the process of real investments. According to the spoke about above, we can make the following conclusion: financial investment is the connecting ring of turning regarding the savings into real investments. With its help the savings get into the production; at similar time they can appear to be relatively independent shape regarding the investments. Foreseeing the fact, that this day joint-stock business is regarded to be barely spread, organization-legislative shape regarding the enterprise; we shall return to conclusion, that financial investments and security market play very important role within the investment process on the method of turning savings into real investments.
Intellectual investment definition. Investment market is a difficult system consisted of different structural elements, between which there is an a lot of connection. Scheme within the drought 5. represents a simple example about structure regarding the globe investment market. As seen from the matter, investment objects are divided into financial and fabric real assets.
Each of them has barely diversified structure. Financial assets concern financial and payment obligations of every kind, which are basically created by the economical agents while their work. This is cash money; deposits existed at the current accounts, short-termed loan obligations, for example, shares and other financial documentation, which prove the property of right at the capital or setting arrangement at the movement of financial resources. Fabric assets are: movable and unmovable property, lend, buildings, precious metals, commodities of long-termed usage, fabric valuables or inventory possessing short-terms of produced service and so on. Technological structure of investment, within first place, expresses significant surplus regarding the financial assets at fabric ones accordingly 57.
3%, ant second, within the structure of financial assets itself securities, short-termed obligations and accounts possessing investment character occupy more and more bigger place. Correlation of financial and fabric assets regarding the investment market should be expressed by the coefficient of financial interrelation. Plan of involving such coefficient belongs to R. Goldsmith, who is the author regarding the works written regarding the structure of local wealth and financial processes of developed countries. This scientist within the 2nd component of 50s and beginning of 60s worked out the method of calculation regarding the coefficient of interrelation.
He calculated this coefficient as conformity of total financial assets with the volume of fabric assets received by deducing regarding the region net foreign assets. Net foreign assets display conformity of foreign debt regarding the provided region and its residents with the one, which are owned by the foreign region and its residents towards this county. Citizens, businesses and other juridical persons have right to have accounts abroad, to release credits to the foreign citizens and to have property abroad. Also, they can be likely to obtain in debts themselves towards the foreign citizens. If the volume of foreign property and financial wealth regarding the region resident surpluses debts towards the foreigners, then net foreign assets appear to be positive volume and on the contrary.
Regarding to the investment nature, which simple kinds regarding the investment market financial and fabric ones, or the real investment markets within the technological conditions should be added by the market of intellectual investments. This final functions within the method of licenses, engineering-consulting service, Now-how, scientific processing, sales and purchasing of projects and others. As within the marketing economics, so at the transmitting stage, alternative variants of creating use of resources, investment resources between them. The principle of inter changing touch upon the realized investments as within the fabric forms, so within the person capital. It is well known that below the technological conditions investment within the person capital is very important and sends a large profit.
This is stated in many economical works. Lauren spot to the investments into the person capital. They notice that investments into the person capital hold a best importance for marketing economics. Nowadays a theory of intellectual capital creates foundation to the realization of investments into the person capital. The authors of this theory concern, that intellectual capital is a difficult category.
It is wider than the person capital, as in it details is regarded to be the independent non-residential resource. Investments into the intellectual capital differ from the ones realized into the person capital. It also concerns the elements of structural capital, which means investments realized into the furniture, computers, programs, patents and trade marks. On the basis of intellectual capital theory a concept of corporate partnership was formed. This conception leans upon the investments placed into the corporate capital.
Corporate capital theory means relations of mutual help and development of trust relation within the separate groups or readiness of participation within the unions. More educated and qualified workers have more possibilities for formation of corporate capital and economical macro-system. On the basis of investments realized subjective leaders of attractive investment surrounding is formed within the corporate capital, that influence significantly upon the development of intellectual investment market. Intellectual investment market has the following peculiarities: First, intellectual investment market is the consisting component of service market. It sends realization of critical commodity by straight contracts between producers and consumers.
Herewith, trade mediating is not the exception. Though there is a principle distinction between mediating and consuming commodities at the market of intellectual investments. Analyzes of different researches show, that within the conditions of transitional period growth regarding the share of mediator structures within the section of consuming commodity of massive request take location in Georgia. The mediator is not requested to hold a special knowledge, only initial details is enough. Of course, mediating at the market of intellectual investments requires high qualification position regarding the firms' specialists.
The mediators themselves, which unite producer-consumers, are not many. Herewith, mediator service at the market of intellectual investments is different shape analogue service regarding the market of massive request commodities within the equal conditions by quality and effectiveness at the expense of reducing expenses regarding the interested sides. Second, the market of intellectual investment influences greatly upon capital movement and the market of labor forces. Third, intellectual investments are protected by the state from the foreign competition, also by export and import of final result of creating use of intellectual investments. Functioning regarding the market of intellectual investments cannot exist without protection of rights at the objects of intellectual property.
Fourth, for entering worldwide market by inner market organizations and intellectual investments more are not needed. Fifth, formation of market values is critical at the conclusions of creating use of intellectual investments. Values of intellectual investment products have not direct connection with the work spent on it. The price of intellectual investment product is defined by what it sends by creating use of within the production process. Herewith, price of intellectual investment process is defined as expression of effect received by this product usage by money.
Market price at the intellectual investment product is formed as agreement one, by creating use of 3 prices of seller and purchaser. The purchaser shall apply for the fact that a profit received from creating use of intellectual investment product, minimally, is to compensate the expenses created by the seller for selling this product and also expanses regarding the buyer for its realization. The seller does not often sell the intellectual investment product, but transmits only the right for its using. Thus, agreement price on this production is close to the buyers' one in practice. Realization of intellectual investments at the market should be provided within the following forms: - by transmitting rights for creating use of licenses, Now-How, commodity sighs and so on; - by selling-transmission of Now-How, technological experiences and so on.
Agreements on such acts of sell and purchase from license agreements are different by the fact, that the owner of Now-How does not refuse its selling, but does not agree with its patenting; - by providing engineering services; - by transmission of technologies, within the method investment partnership, within the bounds of which takes location not only sell and purchase, but in other ways of its distribution consultations, qualifying specialists, transmission of droughts and technological exchanges. Engineering is one regarding the simple forms of realization are the market of intellectual investments. It means providing different engineering-consulting service on the commercial basis. They divide engineering service into 3 groups: two service related with preparing production process; 3 service related with provision of normal continuing regarding the process of production and its realization. To first team belong: a pre-projecting service social-economical researches; topographic processing and planning of location; researching grounds; searching for the minerals; technical-economical statement of project and so on? be projecting service preparing general procedure and recommendations; estimation of expenses created on its exploitation beforehand; preparing technical specialists and so on? c distant service of he project preparing contracting documentation; organization of auction; estimation of suggestions; creating contracts; managing building process; creating and granting certificates about finishing work, creating technical conclusion about building and so on? d special service researching about utilization, different juridical procedures and so on.
To the 2nd team of engineering service belong: service related with the managing and organization regarding the production process, service related with the examination regarding the object; consultations within the financial questions; service related with the production realization researching the conjuncture regarding the market, advertisement organization, service related with the involving the system of informational provision and so on. Engineering consultations, within the conditions of deficit of high-qualified personnel, can give intellectually the investment process, help firms to rise effectiveness, fasten circulation regarding the investment resources. Portfolio investment market is the consisting component regarding the financial investment market. By forming society of share-holders and with the help of financial institutional investors, their activity at the financial investment market help significantly accumulation of independent cash sources within the country, also attracting of foreign investors, fastened circulation of financial investments, effective insurance for financial-investment risks and so on. For clearing investment motivations up and defining levers is state influence we thing advisable discussion of peculiarities regarding the investment circulation within the process of distant production of fabric simple and turnover and financial capitals.
Investment circulation within the process of investment activity is realized within the following simple directions: investments within the fabric assets production of simple and turnover capital? investments in financial assets; investments within the intellectual valuables. Let us discuss investment circulation within the process of distant production regarding the fabric assets simple and turnover capitals. Its every element should be divided into movable and immovable properties. Furniture, mechanisms, turnover capital belongs to the elements of movable physical capital and elements of passive component of simple capital buildings, equipment, non-residential infrastructure to the unmovable one. Distant production regarding the movable physical capital is realized within the industry, and of unmovable ones within the building.
Investment activity should be realized within the method of showing of unmovable property, furniture and other elements of physical capital at the market, or within the case of absence of wanted commodity, within the method of their production building. Investment activity should be realized at the expense of different sources: own, borrowed, attracted sources for investments, budgetary assignations. Structure of sources depends at organization legislative forms of active and newly formed enterprise. Investments should be displayed as within the cash, fabric forms so within the face of property rights and intellectual potential. Foreseeing spoke about above, investment circulation within the distant production of a physical capital may be represented within the following way: Economical essence regarding the provided chain of transformation exists within the following: investments in different for cash, productive, commodity are placed into the objects of investment requests for non-residential activity.
Subsequent to this a process of transformation of investments into non-residential factors takes place. Thus materialization of investments takes place, which appears within the face of rising price of investor's capital property. Exactly the new transformation of capital price finishes investment circulation within the Soviet economical literature. They departed artificially stage of formation of new capital price and stage of their functioning, which defines real position of income of profitableness of these valuables, and finally the period of self-compensation of investments. As first goal of investment are creating profit, investment circulation definitely concerns a period of exploitation of purchased capital valuables till the moment of financial recourses, by which investments within the capital production are compensated.
In this case, production, that is produced within the shape of investment commodity, is realized at the markets of different investments real estate, furniture, fabrics and other markets. What is the distinction between investments and investment commodity, as they coincide with each other within the fabric shape and ability of creating income? To our mind, simple distinction is within the universality degree of investments and investment commodity. Any investment commodity for realization at the markets within the future becomes a factor of production in concrete fabric or cash forms. Fabric transformation of a capital does not mean distant production, it should be even threadbare morally and physically, and investments, as they can be movable shape of cash capital shall make endless and permanent profit. To our mind, this creates investments different from the investment commodity.
Investments into the financial assets take location in relation with their profitableness norms. Income, regarding to the different financial assets, is divided into dividends kind of non-residential income and percents. This is defined by what capital they represent non-residential or loan. A process of investments into the financial assets should be represented within the following way: First, intellectual investment market is the consisting component of service market. It sends realization of critical commodity by straight contracts between producers and consumers.
Herewith, trade mediating is not the exception. Though there is a principle distinction between mediating and consuming commodities at the market of intellectual investments. Analyzes of different researches show, that within the conditions of transitional period growth regarding the share of mediator structures within the section of consuming commodity of massive request take location in Georgia. The mediator is not requested to hold a special knowledge, only initial details is enough. Of course, mediating at the market of intellectual investments requires high qualification position regarding the firms' specialists.
The mediators themselves, which unite producer-consumers, are not many. Herewith, mediator service at the market of intellectual investments is different shape analogue service regarding the market of massive request commodities within the equal conditions by quality and effectiveness at the expense of reducing expenses regarding the interested sides. Second, the market of intellectual investment influences greatly upon capital movement and the market of labor forces. Third, intellectual investments are protected by the state from the foreign competition, also by export and import of final result of creating use of intellectual investments. Functioning regarding the market of intellectual investments cannot exist without protection of rights at the objects of intellectual property.
Fourth, for entering worldwide market by inner market organizations and intellectual investments more are not needed. Fifth, formation of market values is critical at the conclusions of creating use of intellectual investments. Values of intellectual investment products have not direct connection with the work spent on it. The price of intellectual investment product is defined by what it sends by creating use of within the production process. Herewith, price of intellectual investment process is defined as expression of effect received by this product usage by money.
Market price at the intellectual investment product is formed as agreement one, by creating use of 3 prices of seller and purchaser. The purchaser shall apply for the fact that a profit received from creating use of intellectual investment product, minimally, is to compensate the expenses created by the seller for selling this product and also expanses regarding the buyer for its realization. The seller does not often sell the intellectual investment product, but transmits only the right for its using. Thus, agreement price on this production is close to the buyers' one in practice. Realization of intellectual investments at the market should be provided within the following forms: - by transmitting rights for creating use of licenses, Now-How, commodity sighs and so on; - by selling-transmission of Now-How, technological experiences and so on.
Agreements on such acts of sell and purchase from license agreements are different by the fact, that the owner of Now-How does not refuse its selling, but does not agree with its patenting; - by providing engineering services; - by transmission of technologies, within the method investment partnership, within the bounds of which takes location not only sell and purchase, but in other ways of its distribution consultations, qualifying specialists, transmission of droughts and technological exchanges. Engineering is one regarding the simple forms of realization are the market of intellectual investments. It means providing different engineering-consulting service on the commercial basis. They divide engineering service into 3 groups: two service related with preparing production process; 3 service related with provision of normal continuing regarding the process of production and its realization. To first team belong: a pre-projecting service social-economical researches; topographic processing and planning of location; researching grounds; searching for the minerals; technical-economical statement of project and so on? be projecting service preparing general procedure and recommendations; estimation of expenses created on its exploitation beforehand; preparing technical specialists and so on? c distant service of he project preparing contracting documentation; organization of auction; estimation of suggestions; creating contracts; managing building process; creating and granting certificates about finishing work, creating technical conclusion about building and so on? d special service researching about utilization, different juridical procedures and so on.
To the 2nd team of engineering service belong: service related with the managing and organization regarding the production process, service related with the examination regarding the object; consultations within the financial questions; service related with the production realization researching the conjuncture regarding the market, advertisement organization, service related with the involving the system of informational provision and so on. Engineering consultations, within the conditions of deficit of high-qualified personnel, can give intellectually the investment process, help firms to rise effectiveness, fasten circulation regarding the investment resources. Portfolio investment market is the consisting component regarding the financial investment market. By forming society of share-holders and with the help of financial institutional investors, their activity at the financial investment market help significantly accumulation of independent cash sources within the country, also attracting of foreign investors, fastened circulation of financial investments, effective insurance for financial-investment risks and so on. For clearing investment motivations up and defining levers is state influence we thing advisable discussion of peculiarities regarding the investment circulation within the process of distant production of fabric simple and turnover and financial capitals.
Investment circulation within the process of investment activity is realized within the following simple directions: 1. investments within the fabric assets production of simple and turnover capital? 2. investments in financial assets; 3. investments within the intellectual valuables. Let us discuss investment circulation within the process of distant production regarding the fabric assets simple and turnover capitals.
Its every element should be divided into movable and immovable properties. Furniture, mechanisms, turnover capital belongs to the elements of movable physical capital and elements of passive component of simple capital buildings, equipment, non-residential infrastructure to the unmovable one. Distant production regarding the movable physical capital is realized within the industry, and of unmovable ones within the building. Investment activity should be realized within the method of showing of unmovable property, furniture and other elements of physical capital at the market, or within the case of absence of wanted commodity, within the method of their production building. Investment activity should be realized at the expense of different sources: own, borrowed, attracted sources for investments, budgetary assignations.
Structure of sources depends at organization legislative forms of active and newly formed enterprise. Investments should be displayed as within the cash, fabric forms so within the face of property rights and intellectual potential. Foreseeing spoke about above, investment circulation within the distant production of a physical capital may be represented within the following way: Thus, whole system of investment market forms total investment-market space. In this space an economy of financial investments is filled by real and intellectual investment market. Lamara Qoqiauri Real Member of Georgian Academy of Economic Sciences and New-York Academy of Science; Doctor of Economics; Professor.
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