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 ?
The dividend option comes with a dividend payout and a dividend re-investment option.
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She said she favors re-investment in her company in terms of technology and training.
Billingham town centre is crying out for real investment that has been denied by SBC over the years, while Stockton High Street has seen mismanagement and re-investment time and again in the same period.
However, almost a quarter of businesses questioned said they had not earmarked funds for re-investment over the next 12 months.
And this is money that would otherwise help secure competitiveness and re-investment across its production facilities.
Modular design allowing for upgrades without substantial re-investment.
THE much-needed improvement in milk price could easily be spent on re-investment and on increasing costs - but this income needs to be retained by the business.
It's a smart approach, one that the Legislature would be wise to follow, because it sets the state up solidly to begin the re-investment in its infrastructure.
What if the decisions by Beijing and several other East Asian economies to de-couple their currencies from the dollar and slow down their massive re-investment of trade imbalance dollars in long-term dollar-denominated instruments, coupled with Teheran's opening a Euro-denominated oil bourse (undercutting the dollar's role as a safe harbor), cause rates in the bond market to rise steeply, squeezing hospitals' ability to raise capital?
Proceeds from equipment recovery will be returned to the Goodwill Association of Michigan for re-investment in a variety of job-creation and other community programs.