Ijodkor o‘qituvchi jurnali

IJODKOR O‘QITUVCHI JURNALI
 
5 YANVAR / 2022 YIL / 14 – SON 
86 
addition, there are positive externalities (externalities) that are transferred from industries with 
FDI to the rest economies that enhance the impact of FDI on economic growth.
Now we are considering a Model of Optimal Economic Growth with Straight foreign 
investment in intermediate production. A three-sectoral economy produces two intermediate 
goods, which in subsequently used for the production of the final product. Capital goods 
produced by two firms: domestic and foreign. 
Capital goods are fungible for the production of the final good and production function 
implicitly reflects the effect of crowding out domestic foreign production as a result of 
competition. The main competitive the advantage of foreign production is the advanced 
technology, which increases the return on investment in comparison with domestic technology 
(which is typical for developing countries). At the same time, the special structure of domestic 
investment guarantees the complementarity of domestic and foreign investments. Domestic 
investments are reduced if there is a decrease in capital inflows from abroad and vice versa. 
The explanation for this phenomenon is quite simple. Decrease in activity of foreign 
investors leads to a drop in production in this sector and, accordingly, in the industry the 
ultimate good. The demand for labor from the end producer falls, accordingly, households 
receive lower wages, which in turn leads to a decrease in direct domestic investment if 
consumption does not decrease. We will consider foreign and domestic intermediate goods 
as absolutely identical from the point of view of their further processing into the final product. 
In that 
ш
n the case, the elasticity of production for both types of capital will be the same. 
Then it is reasonable to assume that, in the absence of restrictions, the producer of the final 
good will choose the intermediate product that is cheaper (domestic or foreign). However, in 
our model, the volume of production of each of the goods is limited (domestic production - 
the volume of available domestic investment, foreign - FDI price-to-output ratio) thus the final 
producer you have to optimally allocate your resources for the purchase of both goods. 
Households maximize their intertemporal utility by choosing the level of consumption 
and the level of employment in order to satisfy the demand of domestic producers for direct 
domestic investment, which in the future used for the production of intermediate goods. At 
the same time, the level of direct foreign investment is determined exogenously in this model, 
and the foreign firm decides at what marginal price it is willing to purchase this investment. 
In a steady state, the rate of economic growth will be determined by the inflow foreign 
investments and their efficiency in comparison with domestic investments, as well as the 
degree of openness of the country, that is, the ratio of participation foreign capital in 
production. 
The model is divided into four sectors: the producer of the final good, the domestic and 
foreign producers of intermediate goods and households. Foreign direct investment includes 
"merger and accession, construction of new facilities, reinvestment of foreign revenue and 
domestic company loans." In a narrow sense, foreign direct investment refers only to the share 
of permanent management in an enterprise working in the construction of new structures and 
an economy that is not owned by an investor. FDI is private equity, as stated, long-term equity 
and short-term balance of payments. Foreign investment usually includes participation in 
governance, joint venture, technology transfer and experience. Foreign investment shares are 
a type, a set of foreign investments for any period. Excluding direct investment. 

---