Reinvestment

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Reinvestment

The channeling of public and private resources into declining neighborhoods in a coordinated manner to combat disinvestment.

Reinvestment

 

repeated or supplementary investment in a given sector of the economy or in a given country using capital derived from profits. The term “reinvestment” is usually used with respect to foreign capital.

Reinvestment came to be practiced widely by the capitalist monopolies after World War II (1939–45) with the collapse of the colonial system of imperialism and the development of regional integration. Its purposes were to circumvent various forms of prohibition on the import of capital into a country or a region or to avoid payment of taxes levied in connection with the transfer of profits abroad.

Reinvestment by foreign companies in the developing countries is one of the newest methods of neocolonialism. Such reinvestment makes it difficult for the government of the developing country to monitor the movement of foreign capital, especially when the capital is reinvested in locally owned firms and enterprises.

Reinvestment by foreign companies in the developed capitalist countries is usually practiced to circumvent protectionist barriers and penetrate regional economic associations. This practice is pursued by American companies operating in the Common Market countries. The companies are trying by reinvestment to enter the European market and receive the same privileges there as the local companies.

International corporations, which have large networks of branches, joint companies, and licensing agreements to restrict certain geographic zones of the market to a particular corporation, hold a special place in the practice of reinvestment. Inroads are made into a foreign market by building new enterprises or buying up local firms. In many cases, 25 percent of the necessary capital is taken from the reinvestment funds of the parent company, 50 percent from the reinvestment funds of its branches, and 25 percent from loans on the international loancapital markets.

G. G. MATIUKHIN

References in periodicals archive ?
His son Scott runs The Butchers Deli & Bakery next door in Well Street in Paisley's West End and the family are well known in the area for re-investing the fruits of their labour.
It now employs just short of 800 employees and the directors said company's success over the 27 years has been down to re-investing from their own performance and from HSBC funding.
Where it fell down was not re-investing the money raised from these sales back in the local areas by building more replacement council homes.
"We are reducing costs and consolidating to be more profitable and, in turn, re-investing profits to more efficiently handle smart volume through strategic assets," says Milan Kucerak, CEO of the Ames, Iowa-based farmer-owned cooperative.
In today's Sunday Mirror People Power pullout, ex-Cabinet Secretary Gus O'Donnell: "They make money, and can keep providing goods and services, while re-investing profits."
This means that there are no demands for shareholder dividends with a strong focus on re-investing in the local economy, Progressive's branches,, staff training and new products to meet the needs of its Members.
The airport team is now set on re-modelling and re-investing in new technology to ensure the passenger experience is maintained.
So we're re-investing funds from operations in order to meet the demand and continue to grow our operations.
K-Electric believes in re-investing into the society and has reached 3.5 million lives to date through various initiatives such as facilitating education for the underprivileged; providing free electricity to Karachi's key educational and health institutions; educating thousands of school children through its fire safety and energy conservation programmes while engaging youth through cricket and football platforms including KE-Lyari League.
He attributed the significant rise in arrivals from the UK to the government's and the Cyprus Tourism Organisation's strategy of "re-investing" in traditional tourist markets such as Britain and Germany, the favourable exchange rate between the pound and the euro, and the lower fuel prices, which have reduced the airlines' cost of flying to Cyprus.
Cobepa, an independent, privately-held investment company headquartered in Belgium will be joined by Edmond de Rothschild Investment Partners who are re-investing for the third time.
We must get businesses re-investing in the Commonwealth.