Report on International Trade Finance and Investment for UK Economy

This report provides an executive summary and detailed analysis of international trade finance and investment, focusing on their significance for financial stability and economic growth. The report explores the background of financial markets, capital allocation within domestic and international economies, and the challenges related to trade policies and industrialization, with a specific focus on the United Kingdom. It covers topics such as financial management, capital budgeting strategies, investment project selection, and investment governance. The report also includes recommendations for addressing the challenges faced by the UK economy and the importance of investment and trade unions. The analysis encompasses depository and non-depository institutions, and various types of financial markets including money, capital, and equity markets. The report emphasizes the need for strategic capital budgeting and effective investment decisions to boost company growth and profitability within the international market.

INTERNATIONAL TRADE
FINANCE AND
INVESTMENT

EXECUTIVE SUMMARY
International trade finance and investment are important for the organization as they are
providing a huge support in the international trade market and it is crucial for the company and
the country in making a good financial support and strength in the trade market. Investment are
one of the most important factors as investment provide a good support in the financial stability.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Background of the finance market...............................................................................................4
Capital allocation within domestic economy...............................................................................6
Capital allocation within International economy.........................................................................8
Evaluation of Challenges of Trade Policies and industrialization.............................................11
CONCLUSION..............................................................................................................................12
RECOMMENDATION.................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Finance management is defined as managing all the different financial resources which
are associated in the organization. Finance management is one of the most important part of the
organization and it requires the best of financial resources to run the business smoothly and it is
very important to make sudden changes and to increase the assets and other requirements of the
organization. The report is based on the case study of International investment in respect to its
financial management practices. The report will discuss the background of the finance market
and the capital allocations within the domestic economy would be also done in the report. The
allocation of capital resources in the international market are one of the major key points which
will be discussed in the project to understand more about the international market resources.
Further the research will be discussed the economy of United Kingdom and the key challenges of
the economy of UK which the industrialization and trade policies required elaboration. In the end
the recommendations will we provide against the dealing of the challenges which
industrialization and trade policies outfacing in the economic growth of the country.
MAIN BODY
Background of the finance market
Financial management is among the key part of the organizations and is a key area of
practices associated with the organization. It is one of the rare resources which company and
organization hold and also do you do their specific limitation. Financial management is also a
key tool which provide a strength to the company and the organization and it also entertains the
growth in the business (Brown and et.al., 2016). All the organizations channel and those who are
working to improve the management of the organizations always focus in maintaining a financial
resource so that they can have an effective growth oriented opportunities in the target market.
Finance is the most important part of the organization and to run business it is very important to
have good financial stability and the organization and the industry needs a good amount of
finance to run the business and to increase their growth potential. Financial market is linked with
every single function of the organizations which is operated in the organization and it provides
the ease in enhancing the excess abilities for the operations of the organization and company.
Financial market also helped in the trade and it also used in the non-marketable securities,
financial intermediaries another long-term deals of the organization in their investment plans.
They are all the different aspect of the financial market and on the basis of these needs and
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requirements are considered and it is very important for the economy of United Kingdom to
focus on the need and requirement with the entire financial market segregated into the non-
depository and depository Institute.
Depository institutions
Depository institution refer do the component of the financial market Which take deposits
from investor in the working market in the available market. It is the Institute which compromise
all the banking source and commercial bank, mutual saving bank, credit cooperative societies
and saving, loan associations organizations who are working in the financial sources and provide
financial resources. These resources are the stakeholders who are directly involved in dealing
with different funds and other financial ways in the market. The institutions and the stakeholders
are always engaged with providing of liquidity and their solutions to the businessman and
organizations which are associated with different business environment. It is the Institute which
affect the entire financial market as all the organizations and different institutes are engaged in
doing the functions of business which taking financial support from these depositories Institute
to increase the channelize different functions of the organization at different level of activities.
Non depository institutions
This type of Institute of the finance are another key component which are associated with
the different financial market in the United Kingdom with different financial resources. this
market are slightly different as in this it involves the direct transaction with the financial markets.
These Institute involves organizations that functions at the intermediaries but not as a bank and
provide risk on the financial losses, they also denoted as the non depository Institute association
In the market of finance. Institute and stakeholders like mutual fund companies, pension fund
Institute, brokerage firm and different insurance companies who provide financial help. All these
financial institutes and organizations are always provided and put a huge involvement in
enhancing the capital values of the financial market and it created direct influence in the market
situations which is related to the financial solutions. This type of Institute provide direct benefit
to all the people with some significant amount of risk. This organization an individuals would
like to take risk can take the best possible approach is to gain healthy finance outcomes with
taking at risk in financial investment.
Type of finance market
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Financial market is one of the biggest market and is a huge world altogether. Financial
market is a key driver to all the economy of the country and it is the support Institute which help
the economy to work better. it is a key driver to the economy for the organizations and different
companies to entertain all the functions responsibilities, it compromises a lot of various type
which are denoted as one of the sport market or cash, money market, capital market, secondary
market, future market, primary market, depth market, equity market and the over the counter
market with exchange trade market (Shapiro and Hanouna, 2019). these are the dimensions of
the financial market and it is very important to understand the dimension of the financial market.
every way of doing the finance market is having a specific role which deliver some kind of
financial responsibilities and requirements of the society. To gain the maximum level of financial
outcome it is very important in the financial market to have its essential to choose the right
market and the right delivery options of the operations and it requires a great decision-making
while choosing the financial resources.
Capital allocation within domestic economy
International market is denoted as the global market which is associated with in the
organization Capital allocation is denoted as a segregation of the capital resources with the
organization in delivering all different functional responsibilities associated with the industry and
the organization. Allocation of capital is it decision-making which help in increasing the capital
allocation in the international investment organizations which needs to take alert against the
business objective. Allocation of capital includes different practices which are budgeting, project
section and other investment governance (Atmadja and Saputra, 2018). Capital allocation within
the domestic economy mean the distribution and the investing of a company's resources of
finance in ways in which it increase the efficiency and also increase the maximization of profit.
It also help the shareholders to have a much wealth and generate possible increase of money.
The financial market work generally for capitalistic purpose, this is a process in which the flow
of finance work through different pipes.
Strategy capital budgeting
Every organizations have their budget strategies and all the top and successful
organizations in the UK focus in monitoring their financial resources regularly to acquire and
utilize financial decisions of the organization. management at the international investment
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organizations required a financial portfolio which also help and allow the company to provide a
strong AI and the utilizations of the financial resources. With the company. It requires a proper
strategy to make a capital budgeting conducted at the company and it is very essential to access
the need and the requirement of the organizations to have a good budgeting and capital
budgeting strategies. Financial Department always issues different financial guidelines which
involves the approach and how do utilize the resources in the organization. it is very important
for the competitor in the United Kingdom to have a good need and considerations when making
different budgeting decisions in favour to the organization.
Investment project selection
Investment project selection is one of the key approaches which every organizations and
companies use as a financial resource at domestic level. at the domestic level the organizations
always evaluate decisions about the investment in the organizations which contained various
options available in the domestic market. Selection of investment proposal is very important
topic which every company addresses as it is one of the investment drawbacks if the decisions
are not taken properly. every market has its own luxury and challenges which every
organizations need to look well utilizing the market any investment proposal in the market. it is
very important to The management to make the best investment decision so that they can boost
their growth of the company in the market and it is very important for the market to utilize their
financial market at the domestic level to increase their profitability.
Investment governance
Governance is one of the critical sides of the financial allocations in the economy and it
requires a huge consideration while taking the financial allocations. in this it is important to
understand this stab lash certain guidelines and the code and content which needed by the
organizations to cope up in order to make the best level of investment decisions and also to
improve the decision-making in the positive way (Madura, 2020). United Kingdom is having a
very good economic growth and it is one of the benefits further organizations at the domestic
level due to the economic stability of the United Kingdom as the higher authority also need to
overlook different funds and potential allocated. Every organization has an equal opportunity to
generate financial resources for their business operations in the United Kingdom.
RECOMMENDATION
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To recommend it is important for them to understand the important of the investment and
the trade unions as it is crucial and they need to make invest a lot into the investment of different
financial investment to increase the performance of the organization and country. They need to
hace a proper framework in the process of working and need to work in a structural process. It is
important to have a good knowledge of share market and need to have a third party to handle all
the share and investment process.
Capital allocation within International economy
Capital allocations within the international market refers to the international market as it
is a global market in which the organizations work and it is important for the organizations to
allocate the resources of capital and finance at the global level. International market companies
never confined their shares, debentures, securities. As the company only open up its securities in
different investment and the options for the stakeholders and investors who want to invest in the
international level. it is very important to have a good financial resource to work in the
international market and there are a lot of ways in which the organizations can locate the capital
in the international market to find the big investment and the organizations and approaches to
have a good financial investment (Bui and et.al., 2018).
Evaluation of economy,
Economy of the United Kingdom is known as the one of the biggest economic sector in the
world as it is the most developed countries and always try to improve the process of working and
have a good economy in the United Kingdom. In the era of 1800 to 1900, United Kingdom was
ruled many other nations and as they were growing, they have made they working improved
which helped them in improving their economic stability.
Currently London is the financial hub of the United Kingdom because every big MNC’s want to
invest in the London with their corporate offices in the city. Every organization and company
wants to invest in United Kingdom as their financial stability is so high and the economy of the
UK is so good that every organization want to work in UK.
Evaluation of challenge
• There is lack of natural resources in the United Kingdom and it is one of the first
challenge of the government of UK due to trade policies and industrialization.
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• The high market competition is one of the other challenges as the trade policies of the
United Kingdom are very favourable to them in season every MNC’s wants to work in United
Kingdom (Lewis, 2018).
• There is the shortage of talented people in the United Kingdom as the youth is one of the
major population of United Kingdom which shows the lack of experience.
Evaluation of Economy
Economy of the UK is also known as the greatest as well the finest economies in across
world, but from previous few months the country’s economy situations are not effective.
Generally, present economy conditions of the United Kingdom are not favourable at the
international level, because there are lots of global factors has negatively affected to UK’s
economic system. In the time period of 1800 to 1900, this nation was ruled lots of other
countries, so this aspect was enabled to different leaders of existing nation to highly grow own
economics system, and after the cold war the nation seen too higher boost under own economy
(Árva, Pásztor and Pyatanova, 2020). Generally, in that era, there was lots of businesses or
companies of country was started exporting own manufactured products and services within
other nations, and that’s why international trade task of different UK based companies was
offered excellent foreign exchange amount to local government and administration. On the other
hand, multinational companies of other nations were also got motivated for investing in the UK
by running own business operations within this country’s authorization area. That’s why that
investment of various international companies in UK under the time period of 80's as well as 90's
was too positively impacted to economy of existing nation. After gaining lots of investment, the
country’s local people were started developing financially, because they had appropriate
employment or job opportunities.
Nowadays, London is called as financial hub for the country, because almost all
international companies has established their corporate offices within this city. On the other side,
Brexit has also too much affected to the country’s economic system in both ways, positively and
negatively. Generally, when the government of UK was taken decision of exiting European
Union (EU) in year 2016, then the administration of EU wasn’t felt comfortable with this Brexit
decision of the government of country, and then upper management of union ordered to other
European nations which was still members of union that, do not invest within the United
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Kingdom. So, 2016 to17 time period was also too negative ear to economic system of country
(Scissors, 2019). However, after 1 year of decision of Brexit, there was lots of European
countries again started investing within in the United Kingdom’s economic system. According to
many economists, there was 2009 also putted very negative impact on economy of country,
because on that time this nation was faced recession situation, and many of locals was lots of
own employment and jobs. After the recession, present government of nation was reduced its
rates of custom and taxation to highly invite lots of multinational businesses to the investment
purposes. Generally, when there was many MNC's invested in this country’s environment of
business, then local people were enabled again to achieve great employment and job
opportunities.
After the time period of Brexit, existing government of nation puts own huge efforts in
order to motivate various local people to start new ventures as well as start-ups, because it is an
great idea for generating excellent opportunities of employment & jobs within market, and in
time period of 2018-19, country was gained better outcomes from its small start-ups and
businesses, because these ventures was highly contributed for increasing country’s Gross
Domestic Product (GDP). Local government of nation still has depended on these small and
ventures to maintain a very effectiveness in own economic system. Currently there are more than
5.9 million ventures present in the nation. In these all 5.9 million ventures, 5.82 million are just
small & micro businesses. These all 5.82 million ventures have considered as 99.9% of all
existing businesses of country (Henökl, 2018). That’s why all businesses give own excellent
contribution in the overall economic growth of the United Kingdom. However, the local
government cannot be fully depended on these businesses in order to maintain effectiveness
within own economic environment, because currently the international trade investment and
finance also plays equal role in overall growth of country’s economy.
Currently there are British Petroleum, Vodafone, Tesco, Unilever, Marks and Spencer,
Aviva HSBC holdings etc. key UK based multinational corporations currently provides excellent
contribution in overall growth of nation, because these companies have enabled to government to
gain excellent amount of foreign exchange. Generally, when a nation has maximum amount of
foreign exchange, then that nation can easily grow own financial as well as economic conditions
at global market place. On the other side, present Covid 19 (corona virus) pandemic also very
negatively impacts to the economic system of UK.
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Evaluation of Challenges of Trade Policies and industrialization
Nowadays the government of UK faces lots of challenges because of trade policies and
industrialization, in which few key challenges as well as issues has been mentioned below;
High market competition
According to top-level management of many international companies, there are the
United Kingdom’s trade policies are too favourable to companies and businesses of other
nations, so currently lots of MNC's operates own business operations within this nation, in which
this factor has become very big challenge to various local businesses of the UK (Cumming and
et.al., 2017). For example; Walmart is an American retail business that nowadays serves within
this country as well in the form of Asda, because Asda is subsidiary of Walmart. So, this
American business can develop a big challenge to local retail ventures in the form of very higher
market competition. That’s why, trade policies and industrialization increase challenge relating
to the high market competition.
Lack of natural resources
This is one of the biggest challenges to the United Kingdom’s government due to
industrialization & trade policies. Generally, most industries always require many natural
resources to properly run own business operations. For example; coal, fuel, timber and natural
gages etc. so, these natural resources are reducing reduces day to day. In this situation the
challenge of lack of natural resources has developed due to these trade policies &
industrialization factors.
Shortage of talented people
Nowadays, youth is one of prime population to this country, in which because of trade
policies and industrialization, there are lots of skilled and talented youngsters of United Kingdom
moves abroad, like; Germany, USA, France, Canada etc. for properly utilizing own talent as well
as skills (Voth, 2018). So, this is a very big challenge for government of the country, because
factors like trade policies and industrialization promotes the challenge relating to talented people
shortage.
Critical analysis
From the above analysis it can be analysed that due to increasing market competitions
organizations have to increase their geographical reach in other countries because of which it
requires a large amount of capital investments. Trade associations are the trade unions which are
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made in order to maintain a efficient trading operation and because of which trading groups are
made in order to maintain synchronize operations by which it can make sure that collaborative
effort is made in order to increase the work productivity. With that organization also have to
analyse the economic capabilities of the targetted location and it home country and because of
the negative impact of Brexit organizations have to face a large amount of economic challenges.
With that organizational expenditures are also increased because of the several international
trade rules and also at the same time companies also have to face shortages of workforces by
which it can provide high level of services to customers.
CONCLUSION
It can be concluded that, the financial management is basically a process of managing
different financial resources which has associated with an organization. This process is
considered as making decision for the proper utilization of a company’s various productive
resources of finance along with monitoring and controlling risk factors involved in process of
financial decision-making. The domestic market place is fully safer than the global market place
in order to allocate various potential resources of finance which has associated with an
organization or company. There are key challenges relating to the United Kingdom’s financial
allocation are increasing competition within the market place, reducing precious natural
resources and promoting the challenge based on short of talent people. That’s why government
of the UK need to take some productive initiatives for systematically dealing with the impact of
different internal and external factors.
RECOMMENDATION
In order to achieve the best of the financial management it is very important for the
organizations to focus on all the key areas associated with the financial decisions as mentioned
decisions are most important way of doing the work and it helps in do the working process
better.
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REFERENCES
Books and Journals
Árva, L., Pásztor, S. and Pyatanova, V., 2020. Some thoughts on the relationship between
multinational corporation strategies and the changing patterns of
international trade: The geographical optimization principle. Economy
and Finance: English Language Edition of Gazdaság és Pénzügy. 7(1).
pp.56-77.
Atmadja, A.T. and Saputra, K.A.K., 2018. Determinant factors influencing the accountability of
village financial management. Academy of Strategic Management
Journal, 17(1), pp.1-9.
Brown and et.al., 2016. Financial management in the sport industry. Taylor & Francis.
Bui and et.al., 2018. Improving the technical efficiency of Sengcu rice producers through better
financial management and sustainable farming practices in
mountainous areas of Vietnam. Sustainability, 10(7), p.2279.
Cumming, D., and et.al., 2017. Law, finance, and the international mobility of corporate
governance.
Henökl, T., 2018. How Brexit affects EU external action: The UK’s legacy in European
international cooperation. Futures. 97. pp.63-72.
Lewis, C.W., 2018. The Field of Public Budgeting and Financial Management, 1789–2004.
In Handbook of Public Administration (pp. 151-225). Routledge.
Madura, J., 2020. International financial management. Cengage Learning.
Scissors, D., 2019. The Belt and Road Is Overhyped, Commercially. Statement before the Senate
Committee on Finance, Subcommittee on International Trade, Customs
and Global Competitiveness, June. 12.
Shapiro, A.C. and Hanouna, P., 2019. Multinational financial management. John Wiley & Sons.
Voth, H. J., 2018. Finance and growth in the United Kingdom. In Handbook of Finance and
Development. Edward Elgar Publishing.
Online
[ONLINE] Available through :<>
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