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 ?
Rather than using the proceeds from the exercised stock options to repurchase shares, companies could reinvest the proceeds into internal investments.
The central bank of the UAE has announced a plan to reinvest in US Treasury bills.
Ultimately, the power of dividend reinvestment means, not surprisingly, that you may be able to help yourself if you look for quality dividend-paying stocks - and then reinvest the dividends, month after month and year after year.
According to China's Ministry of Commerce (MOFCOM), a Chinese holding company (CHC) is allowed to reinvest in its Chinese subsidiaries and increase its own registered capital using renminbi profits, proceeds from capital reduction, liquidation and divestment, transfer of equity interests and return on investment as well as income received from other means.
Our primary goal is to optimise benefits for our investors; we believe one way to do that is by giving them the choice to reinvest their dividend into the fund and increase their share in UDF," said Saleem Khokhar, the Head of Equities at NBAD's Asset Management Group.
Chiarelli said money the Army has found through identifying efficiencies is now being used to reinvest in programs like the M1 Abrams tank, the M2 Bradley Fighting Vehicle and the Stryker.
She added: "Previous research showed one in three consumers planned to reinvest their money.
As I've said, if you buy equal or up and reinvest all of the cash, you will pay no tax on your exchange and debt plays no part in the transaction.
The new service, which was introduced earlier this month as a result of customer feedback, allows customers to reinvest maturing savings certificates into a new issue directly over the telephone 17 hours a day, seven days a week without having to fill out additional forms.
Insured disaster victims who lose tangible personal property used in their trade or business or held for investment can reinvest their proceeds in any tangible personal property.
We will reinvest funds raised over the first few years of flight back into the business, striving constantly to lower prices.
I've been told I can reinvest some, but not all, and keep the tax advantages.