Financial Markets and Capital Allocation in International Trade and Investment

This report discusses the role of financial markets in allocating capital within domestic and international economies, key challenges faced by countries due to industrialization and trade policies, and their impact on the UK economy.

INTERNATIONAL TRADE
AND INVESTMENT

TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................................................................2
INTRODUCTION...........................................................................................................................3
FINANCIAL MARKETS WORK TO ALLOCATE CAPITAL....................................................3
Background of financial market.................................................................................................3
Capital Allocation within Domestic Economy...........................................................................4
Capital Allocation within International Markets........................................................................5
KEY CHALLENGES WHICH THE COUNTRY HAVE FACED BECAUSE OF THE
INDUSTRIALIZATION AND TRADE POLICIES:.....................................................................6
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................11
Online:......................................................................................................................................11

INTRODUCTION
Financial market is regarded to be one of the competency that will produce the right amount of
Economics solutions that is in regard to the organisational upliftment. It is also known to be the
supplement for different domestic levels that will include savings which are necessary for the
organisation in order to ensure the fact that the finances that are a part of the organisation will
look after all the transactions that are in regard to the organisation (Zhang and et.al, 2020). There
are certain applications that are being made by the organisation such that the mobilization of
funds can be gratified. The platform will produce the different effects that are necessary for the
organisation in order to move ahead with the traders as well as the buyers aspect. This will also
bring about a development towards international economics. Working on international
investment is a one of the prominent criteria that would help people to enhance measures that
would arrive clients. It is also one of the development process that will bring about the initiation
which are in regard to the organisational trading and investment policies. The domestic economy
as well as the international trade are the two major concepts that are in regard to this financial
market and therefore portfolios are made to bring about investors in this regard. A proper
understanding regarding different financial markets as well as the allocation of capital is
explained in this report with a prominent towards the fact of financial market as well as the
allocation of domestic economy. The capital allocation is also one of the major importance and
deriving the taxation policies and therefore that is explained in this report. The international
market allocation is also brought about with finest components in this particular report. The
report will highlight the aspects of international trade and investment and will also explain the
components in it.
FINANCIAL MARKETS WORK TO ALLOCATE CAPITAL
Background of financial market
Financial market is said to be one of those Marketplace that will bring about two different
mechanism like that of involving securities that will bring about equity is bond and
commodities. There are certain divisions that will include demand over the pricing as well as
market forces that can uplift financial market strategies (Sansa, 2020). It is a Marketplace where
there is an intention of buying and also the goods and services are brought about by ki control
measures which are a part of lenders and borrowers. There is an enhanced measures that are in

regard to the capital which can be increased with respect to the national income. The financial
markets are said to be those assets that will help to highlight the profitable standards and also
derived essential functions which are necessary to be one of those abilities in increasing Savings
and investments. The different types of financial markets that are included which are as follows:
Capital market: the capital market is a considerable aspect that will engage different financial
Markets and also will bring about financial securities. The equity as well as the bonds are
comprising of stocks and other securities that are in regard to the purchasing of capital market.
The companies that are apart of this will include different trade financial securities that are a part
of stock market and bond market.
Stock market: this is regarded to be one of the component of public traded companies. It will
make sure that the public credit company will rise the different stock issues that are in regard to
the company's upliftment. The shapes that are in regard to the organisation are governed by the
records of different ownership that a part of increasing stocks (Jiang and et.al, 2019).
Bond market: the bond market is said to be the one that is going for trading ground for bonds.
This is also one of those categories that will bring about lenders for investors that would help to
rise the required money in the definite period that is being expertise.
Capital Allocation within Domestic Economy
It is a traditional method in order to deal with the concerns of efficiency that are in regard to
corporate tax. There are certain instances where the allocation of resources is carry forwarded
and this will also impact the production which is one of the possibility measures of efficiency.
The cause that are a part of efficiency are also determined by how far the existence of the
physical assets is being designed. These are the important chapters that are in regard to the
allocation of capital and that within the domestic economy. There are certain available
provisions that are part of taxation policies which will also get enacted by the production
activities and also the detection facilities. The domestic activities are highlighted by the
protecting interest and the tax is gratified over the prospective investment that is one of the
marginal values which can be returned over forward-looking (Schoenfeld, 2020). Estimation that
are put forth in order to ensure prospective investment is also one of the statutory rate that will
highlight the probable measures of distortions in firms. There is an aggregate that is the
estimated over the taxation policies and the structure is determined by the inventory which are
aggregated assets of specific data. These measures are also included as one of those burdens of

tax and are also experimented over different expenditure. The tangible investments are the ratio
of to which they can be included as a part of research and advertisement. This experimentation
will include certain measures that are overstated and are also one of those entities which are
regarded as future benefits. The allocation of capital in this regard is totally towards the
available provisions and how far the tax burdens are being calculated. The account is also
towards the corporate tax that would highlight the prospective investment and the illustrations
are brought about in terms of how far these taxation policies are bringing about a benefit to the
marginal profit. There are different financial that are being affected by the taxation rate and they
are significantly worked upon by the corporate and non corporate sector (Ali and et.al, 2020).
Capital Allocation within International Markets
International markets are said to be at a pace of development and therefore there are certain
components that are falling in regard to this market to bring about a variation towards the onset
of assets. One May seriously not be able to identify the aspects unless and until they are of
proper knowledge and that can be incorporated over different choices that are brought about by a
stimulus. This is one of the biggest variations that is usually being dealt by the international
Markets and there are certain organisations that are in the midst of competition while dealing
with their finances. The rate of dollar is comparatively more when compared to various
countries currencies. This is an important phenomenon that would highlight the prominence of
investments as well as the macroeconomic policies that are of major importance. There are
different macroeconomic policies that will fall in regard to the industrial countries. There is a
generation of massive swings that will fall in regard to exchange rate and that will bring about
an endless growing deficit. The different fiscal policies that are falling as a part of expansionary
measures will also bring about a drastic reduction in the inflation rate. The value of dollar is said
to be one of the stimulating factor that will bring about a contradiction and also aggregative
demand. This is one of the appreciation measured where there are certain stimulus that is flawed
overseas. One of the most important criteria is the consequence of fiscal expansion. This is one
of the consolidation measures that is accounting for the expanding economy (Kamran and et.al,
2019). While dealing with the investment data on international basis there are certain taxation
policies that are also aggregated upon the generation of protectionist. This is one of the
macroeconomic policy that will bring in different measures of observation that can respond to
price changes. Certain explanations fall in this regard where the factors that are a part of foreign

currency are consistent and are also balanced over the rate of personification. The productivity
as well as the growth is maintained at a profitable instance but there is a persistent see that will
have to be maintained. The development that is in regard to different macroeconomic policies
with respect to the exchange rates and wages is also one of the major consideration while
dealing with the international allocation of capital. An analysis of the entire framework that will
bring about different sections that are incurred over the allocation of international capital is also
throwing limelight over the interest of different groups that are specified over the protectionist
sentiment. Various arguments have taken place in order to deal with the right amount of
exchange rate changes and the flow in this regard is dealing where the existing factor which is of
slow response.
KEY CHALLENGES WHICH THE COUNTRY HAVE FACED BECAUSE
OF THE INDUSTRIALIZATION AND TRADE POLICIES:
Industrialization is defined as the process in which the economy is converted from the traditional
business to an industrial society it includes the extensive production reestablishment of the
economy (Akselsen and et.al 2019). The major problem from the industrialization can be seen as
poor capital formation, political factors, poor infrastructural services are the key issues
associated with the industrialization for the country.
Economy of the UK and the industrialization or trade policy for the Country :
United Kingdom is considered as the most globalized economy in the world, which involves the
England, Wales, Northern Ireland and Scotland countries. UK's economy is the fifth greatest
National economy in the world which is track by the records of gross domestic product and
listed as tenth in the purchasing power parity. Nation is the fifth largest importer and exporter in
the world.
As the industrialization policy of the UK aims to the industrial planning to enhance the
productivity in the economy by backing the businesses to develop the relevant jobs. It also aims
to enhance the earning power of the citizens through making investment in the infrastructure,
businesses. The key focus of the government of the country is to promote the jobs as it is their
central focus, but also to support the growth and emerging of the existing industries so that they
will able to earn more revenues or to increase the economic rate of the nation. The trade policy
define as the regulation and contracts which manage the import and exports of the goods and
services of the foreign countries (Leblond and Viju-Miljusevic, 2019). UK trade policy states as

the European Union has controlled all the international trade processes for the UK. The trade
policy of the nation mainly aims to provide cooperation to the creation of the new policies for
trade in Brexit era.
Key issues can the country face are as follows:
Environmental drawback:
The main challenge which is associated with the industrialization is that it negatively impact the
environment. Due to this the pollution is heavily driven into the atmosphere which cause the
major health related problems to the people. Because of the industrialization number of the
company increases which can use the resources to design or produce their products which can
cause the pollution in the environment. As company denies to pay for the damaging the
environment also when these factors are not considering in the pricing but considers as the
negative externality (Alisjahbana). Then this price burden is imposed in the society as a form of
deforestation, pollution, global warming and other environmental damage. This cause can UK
nation can faced due to industrialization.
Financial drawback:
Industrialization is the main reason which is driving the big differences between the rich and
poor people. It is mainly because of the employee and capital division. For those who have their
capital they are able to earn the excessive revenues which is majorly from the economic activity.
It is resulted as the huge inconsistency in the income and prosperity. Due to this the major
displacement in the labours can be seen which cause the unemployment rate in the country
which is not good for the economy of the country.
Social drawback:
Industrialization majorly drives the migration of the labours to cities because of this the
industrial employees are loosing their individuality. They are forced to satisfy with the low wage
which restricts them to live their life fullest. It also affects their health as to working in the
pollutive environment,
Working conditions which brought problem due to industrialization:
As industrialization can bring opportunities for the country as it rise their economy rate also
leads to the urbanization. But for that employees have to pay the price by giving up on their
individuality (,Lehtovuori, Tartia and Cerrone, 2019). They are expected to work for more than

usual working hour which impacts their life. Due to this company also reduce the man power by
using new technologies that cause the unemployment rate.
Child labour:
As because of the industrialization company demands for the workers who work at low salary
but some denies to work on this condition. Due to this they hire a child labour who work like
adult but on the low salary. This can majorly impact the country literacy rate, if the children are
going for the work then it is the major problem as they are not able to access the education or to
shape their successful career. It is the major problem which can country face because of the
industrialization.
Power distribution:
As for the UK country their trade policy is managed by the European Union, and Brexit changes
all of this which is enabling the UK nation to describe or to make negotiation for their position
in the whole trade system of the world. As country can face the challenges because of the power
distribution. As of now the country has no barriers for the trade and also they are not prohibited
to the transfer of the capital (Dastbaz, Naudé and Manoochehri, 2018).
Price fluctuation:
Price fluctuation is as to rise or down on the price of commodities. It is mainly drives from the
market force. As for the country economy major contribution is made by the businesses
therefore industries buys their raw materials from international trade as if the international prices
are high then company do not invest on the materials which can affect their productivity.
Regulatory trade barriers:
It is defined as the any legal barriers which completely prohibited the imports. It involves the
safety policies, pollution standards or involve the standards for the product which is used to
specify that the product is able to meet the policies which is set by the local government.
Therefore, for the UK country if their industries are exporting their product then they must have
to ensure that it meets all standard which is set by the country for good position in the global
world.
Tariffs barrier:

It is defined as the tax which is imposed by the country on the commodities from other country.
It is mainly used by the government of the company to raise the price on the imported goods and
services (Tomba, 2018). Therefore, the high price is imposed on the customer. It gives the
impact as decreasing the availability of the products and services which is resulting as a low
earning, also cause the unemployment for the country or affect the economic growth of the
country.
Voluntary export restraints:
It is the barrier of the trade which restricts the product quantity, as the exporting countries are
allowed to export the commodities in other countries. It increases the customer surplus in the
market and decrease the import in the country market. Due to this national welfare might reduce
or increase when the huge exporting country can process with the VER.
Trade barriers can give the outcome as to higher in the prices for both the customers as
well as for the industries for that reason organizations proceed to invest more on the raw
materials for producing the products and services. So which enables the company to raise the
prices on the product so that it can be bought by the customer to run their business smoothly.
Therefore, through which the customer only buy few products which can affect the economy of
the country (Bowen and et.al 2017). As these are the Trade and the industrialization challenges
which can the UK country face. Therefore, it can drive many changes in the economy of the
country.
Recommendations:
Therefore, for the betterment in the economic growth of the country they can proceed to select
the market which is not majorly impacted by the economic sanctions. Export the different range
of the goods and services which is not based on the trade sanctions, they can also proceed to
restrict the market entry if it seems that the sanction is lifted. UK country can also proceed to
create the value processes in their target international market to enhance the customer affection
towards their country's product.

CONCLUSION
From the above report it is concluded that the international trade plays a crucial role to
promote the economy of the country. As it drives many changes in the economy of the country it
might rise or decrease the economic growth. This report illustrates the way which the financial
market used to assign the capital and investment in the local economy and for the global trade
for the economy development process. It described the financial market background, and the
capital allocation to the international market. It further described the Economy of the country
along with the key challenges which can country might have faced. As above, it is described the
factors of the industrialization and the trade barriers which can affect the economy of the
country. The industrialization and trade policies are described for the country for the
international trade also include the recommendation.

REFERENCES
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