Problem of Bd Capital Market

In: Business and Management

Submitted By mahedi22
Words 4757
Pages 20
Introduction

Investment Climate means the general economic conditions affecting the financial markets. A favorable investment climate encourages businesses to improve efficiency and productivity in order to increase revenues and capital available for investment. It also gives investors confidence in the market and encourages them to invest more capital.

Investment Climate

The investment climate in a country is the collective set of incentives which establish the “rules of the game” to which economic actors must adhere. Set by a wide variety of sources, including government policies, cultures of public administration, and institutional, social, and physical infrastructure, the investment climate determines the level and uncertainty of returns expected by economic agents and consequently impacts the quality and quantity of investment and the incentives to productively employ inputs. The investment climate can be broken down into the following three main areas:

(1) Macroeconomic and Trade Policy - The capacity of domestic institutions and economic policy (e.g. fiscal, monetary, trade, and exchange rate policy, administration of customs and ports, security of property rights, strength of rule of law, and political stability) to reduce costs of international trade and finance and ensure a consistent and non-distortionary basis for investment, production and exchange;

(2) Microeconomic Framework - The contribution of microeconomic regulation (e.g. rules governing market entry and exit and factor markets) and enforcing agencies to efficient, expeditious, and predictable processes of production and exchange;

(3) Enabling Infrastructure - The cost, availability, and reliability of key public factors of production and exchange (e.g. credit, electricity, land, knowledge, physical security, skilled employees, transport).

None of these sectors, or the…...

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