Capital

Capital

1. International flows of capital result of purchase and sale of real and financial assets across national borders

   • Real assets-physical or tangible items that are traded
   • Financial assets-intangibles such as currency, stocks and bonds, which can be traded on world's financial market.

2. Refers to financial side of international trade

3. Finance flows in opposite direction to services and merchandise purchased

4. Growing interconnectivity of global trade has increased globalisation of capital flows

5. Most flows between small no. of ACs

   • Network widening as growing no. of LIDCs become more intergrated into global trade system

6. Significant feature of global capital flow-most flows are intra-firm

   • Especially within MNCs