Český finanční a účetní časopis 2011(3):22-31 | DOI: 10.18267/j.cfuc.111

An Analysis of Costs and Revenues of Net Foreign Investment Position in Advanced and Transitive Countries

Karel Brůna
Doc. Ing. Karel Brůna, Ph.D. - docent; Katedra měnové teorie a politiky, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <bruna@vse.cz>.

Presented article deals with a theoretical analysis of dynamics of both net international investment position to GDP ratio and net costs of negative investment position in terms of its main determinants. It also analyzes a special case of a link between negative net investment position and positive net revenues. Next it is discussed how far is this case possible in transitive countries. The article points out important differences between a position of large advanced and small transitive economies in case of costs of net investment position. With respect to this main factors as country's position of FDI lender/debtor, country's currency position of investment/invoicing currency, exogeneity of foreign assets and liabilities interest yields and last but not least role of FX reserves accumulation by central bank and position of foreign currency denominated loans on foreign liabilities side are discussed

Keywords: Net investment position; FDI; Interest rate differential.
JEL classification: E58, F21, F34

Published: October 1, 2011  Show citation

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Brůna, K. (2011). An Analysis of Costs and Revenues of Net Foreign Investment Position in Advanced and Transitive Countries. Czech Financial and Accounting Journal, 2011(3), 22-31. doi: 10.18267/j.cfuc.111
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