The value of investment in a market economy is displayed in their definition. Indeed, they may include ordinary cash resources, bank deposits, stocks, shares and other securities, as well as machinery, technology, equipment and licenses.
We must not forget about property rights and intellectual values, which can be invested in any object of entrepreneurial activity in order to profit in the future and achieve a high effect of social significance. Investments and their role in the economy are determined by their financial definition. These are mainly assets invested in economic activities to generate income.
Using an economic definition, investments are represented by the costs associated with the formation of fixed and working capital. Any changes that have occurred in inventories may be attributed to movements in fixed capital expenditures. The value of investments in a market economy is clearly displayed in the process of investing certain funds in various forms, which is inextricably linked to any effect or just income. Investments, first of all, are a resource, the use of which contributes to the achievement of the intended result.
Thus, the role of investment in a market economy is reflected in the close interaction of two aspects of investment activity: resource costs and results. Moreover, the absence of the desired result when using investments shows their futility. The importance of investments in a market economy is confirmed by the use of certain financial resources in the form of investments of various kinds (short-term or long-term). Investing can be carried out both by legal entities and individuals. The following types of investments are known from the specialized literature: venture, portfolio, annuities and direct.
In Russia, the value of investment in a market economy cannot be overestimated. So, investments can be made when creating business entities with participation in the equity equivalent of foreign capital. The main problem of modern domestic business is the lack of incentives to attract foreign capital. Therefore, two issues are considered relevant today: in which sectors should borrowing be limited and in which areas should additional inflows be made in the first place. Foreign investments can be attracted in the form of direct and portfolio “injections” of cash.
Another area of additional capital inflows is loans and borrowings. In the area of the financial market, there is such a thing as real investment, represented by capital investments in real estate, land, equipment, machinery and spare parts. This type of investment may also include working capital costs.
