Guaranteed Higher Grade!
Free Quote
November 28, 2024
This study examines the worldwide significance of financial markets, international commerce, and governance. International commerce is one of the most significant and essential variables. It substantially aids many enterprises in conducting global commerce to grow and prosper in the marketplace, therefore maintaining their position in a highly competitive and dynamic industry (Ahn 2020). Countries with effective international commerce are prospering and possess the capacity to control the global economy. This article examines the financial markets of the United Kingdom. The financial market is crucial at now. It has the capacity to enhance and advance a nation's output and performance positively. The financial market is a venue where transactions involving financial assets, such as shares, debentures, and bonds, occur regularly. The discussion is further upon below. This study examines capital allocation in both foreign and local economies, used by various organizations to achieve profitability and development. Capital allocation refers to the distribution of a nation's resources to optimize returns, hence improving efficiency and effectiveness. Due to the country's size and the significance of its endeavors, capital allocation is a critical factor. The study examines a rising country and the challenges it encounters due to industrialization and trade policy.
The financial market is crucial at now, with the capacity to enhance a nation's production and performance positively. The financial market is a venue where transactions involving financial assets, such as shares, debentures, and bonds, occur routinely (Accominotti and Ugolini 2019). It remains accessible to the general populace as no supplementary fees are imposed, rendering it one of the marketplaces that consistently experiences high supply annually. Many of its commodities, sold daily, monthly, or annually, might possess significant value if they provide a high return, hence bringing many bidders to the system (Bouët and Vaubourg 2016). As the return increases, so does the risk; hence, it is anticipated that a higher risk correlates with a greater payoff.
Individuals use many instruments within global financial markets to fulfill their requirements, with each instrument having distinct worth and importance in contemporary society. Consequently, it is essential to evaluate and choose the optimal solution from the list to get enhanced development and advancement in a little timeframe. The foremost instruments employed in global financial markets encompass equity markets, historically and contemporarily significant, alongside financial securities, derivatives, commodities, and bonds, most of which possess substantial relevance (Bhogal and Trivedi 2019). The forex market is vital as it pertains to foreign currency reserves and exchange, both essential for a nation's economic success. A financial market encompasses the buying and selling of securities, derivatives, currencies, shares, bonds, and secondary market equity transactions.
The United Kingdom leads in the number of financial markets it has. The United Kingdom accounts for over eighteen percent of international cross-border mortgage loans and has one of the biggest insurance sectors in Europe and globally, hence holding significant value in the current market. Insurance premiums constitute around nineteen percent of total premiums in Europe and five to six percent of worldwide premiums (Niepmann and Schmidt-Eisenlohr 2017). London, the capital of the United Kingdom, is recognized as a financial center due to the existence of over 200 banking institutions and their branches, with a foreign currency turnover above thirty-seven percent relative to the global total. Moreover, the financial services sector in the UK contributed £132 billion to the national gross domestic product, representing around six percent of total economic activity, with London comprising over half of that amount (Terzi 2016).
The United Kingdom financial market supports the government by providing substantial funds rapidly, making it essential for the nation's long-term growth and development. A diverse array of financial market enterprises facilitates national prosperity and improves living standards by enabling citizens to engage in transactions that capitalize on the higher returns of the present market. Moreover, it generates employment opportunities for a considerable number of individuals, contributing to the reduction of redundancy in the nation by enabling skilled professionals to pursue careers in the financial market sector, which offers a wide array of long-term personal and professional development prospects (Caballero, Candelaria and Hale 2018). Moreover, the United Kingdom is strategically situated in both the main and secondary markets, enabling it to regulate the market according to its needs and providing the country with a competitive advantage in market influence.
An economy may be defined as a framework or, more specifically, a platform where all activities pertaining to economic operations occur, illustrating how individuals in a particular region make a living and fulfill their daily expenses (Maggiori, Neiman and Schreger 2018). Economic activities, conversely, depend on or are associated with the use of finite resources to satisfy various needs, including consumption, which involves the exchange of goods and services for currency. There are three types of economies: mixed economies, planned or socialist economies, and market-based or capitalist economies, with each nation operating its economy according to its own demands and requirements (Faccio, Marchica and Mura 2016).
The domestic economy pertains to the trade of goods and services inside a singular economy confined solely within a nation's boundaries. The United Kingdom is well-positioned, excelling in both home and international markets. The economy of the United Kingdom ranks as the sixth biggest globally, valued at $2.83 trillion, behind India, Germany, Japan, China, and the United States (Bauer and Zanjani 2016). The population is 66 million, a substantial fraction of whom are youth, therefore contributing to the nation's growth and development via engagement in economically advantageous activities. The United Kingdom comprises four constituent parts: Scotland, Wales, Northern Ireland, and England, with England being the predominant contributor to gross domestic product, earning it the designation "heart of the United Kingdom" (Li and Xing 2018). Its absence would hinder the United Kingdom's competitive market position. The economy is characterized as mixed, with both public and private sectors owning and managing resources, making it a vital element for the nation's long-term prosperity and development. The European Union serves as the United Kingdom's primary trading partner, representing approximately 44 percent of annual exports. While all sectors contribute to the economy, the aerospace, gas, and crude oil industries constitute a substantial portion, facilitating rapid growth within a brief timeframe (Said 2016). Q
Capital allocation refers to the distribution of a nation's resources to optimize returns, thereby improving efficiency and effectiveness (Burton 2020). Due to the country's scale and the significance of its operations, capital allocation is a critical component, which is systematically and chronologically outlined below.
Small enterprises are essential for any nation as they bridge the divide between consumers and wholesalers by providing goods and services to individuals lacking direct access to larger firms that can fulfill their needs and expectations. The United Kingdom allocates significant resources to this sector due to its myriad advantages (Burton 2020). For instance, it creates employment opportunities, thereby mitigating unemployment and enhancing the overall standard of living for the populace.
Infrastructure is crucial to a nation's economy, as it fosters growth and prosperity; however, improper development can adversely impact the country's reputation and long-term economic potential. Furthermore, it enhances living standards by providing individuals with various opportunities to excel in a highly competitive environment. The United Kingdom prioritizes this aspect and has established an infrastructure that enables businesses to significantly contribute to the nation's GDP through the effective utilization of facilities provided by the government. Consequently, it facilitates the country's connectivity with the global market, ensuring seamless business transactions with minimal disruptions (Aktas, et al. 2019).
The international market is a platform where companies engage in trade globally to facilitate their growth and enhance their market value (Banerjee, Devereux, and Lombardo 2016). The United Kingdom employs various strategies to transfer its capital to the international market, which are elaborated upon below:
Mergers and acquisitions are pivotal mechanisms that enable underperforming companies to collaborate with successful counterparts, facilitating mutual profitability. They also contribute to the reduction of competition and, in certain instances, the consolidation of market share (Zysman 2018). The United Kingdom effectively leverages this strategy to enhance its presence in the United Arab Emirates market, fostering long-term prosperity for both nations.
Debt repayment pertains to a nation's obligation to service interest in addition to the principal sum borrowed for various purposes, predominantly financial investment. Debt may manifest in several forms, including financial instruments, bonds, and cash. The United Kingdom consistently fulfills its payment obligations to the United Arab Emirates to avert the risk of descending into a debt trap that could constrain the nation's activities over time (Bustos Garber and Ponticelli 2016).
The economy of the United Arab Emirates is predominantly reliant on oil and its derivatives, as it ranks among the world's largest producers and exporters of these commodities. It features a mixed market economy, with natural gas and oil production constituting approximately 77 percent of GDP and employing the majority of the nation's 97 million inhabitants. With a Gross Domestic Product of approximately US$ 415 billion, it stands as the second-largest economy in the Middle East, following Saudi Arabia (Nuhoho et al. 2018). Additionally, the country has consistently surpassed its GDP growth targets, demonstrating long-term performance improvements. The UAE primarily exports dried fish, natural gas, dates, crude oil, and various agricultural products to Oman, India, the United States, Switzerland, Iran, and Japan, while importing chemicals, food, and machinery predominantly from India and the United States (Small and Al Mazrooei 2016).
Industrialization: For any nation that wants to diversify in the market, industrialization is the most significant, critical, and crucial aspect because t is a practise which aids in the growth of industrialization by the usages of advanced strategies and methodologies, which can be helpful in terms of raising the quality of economic growth (Manda and Ben Dhaou 2019). Connections, technology, labour capital, and Land are five key aspects that all work together to aid a country's industrialization. It originated in late eighteenth-century Europe and North America, and due to its great value, it spread over the world. The United Arab Emirates is a strategically located country with developed and well-connected parts to the rest of the globe, allowing it to ensure that all actions are directed toward achieving the stated goals and objectives (Xu, David and Kim 2018). By increasing the usage of advanced technology in the production of products and services, industrialization could significant aid a country like the United Arab Emirates alleviate poverty and hence raise the standard of living of its population. On this path, there are a few challenges along the way, which are explained here.
Emigration: Individuals relocate to other countries where job opportunities are more abundant, allowing them to earn higher wages than in the United Arab Emirates. Emigration poses a significant issue in the United Arab Emirates (Alshamsi and Saeed 2018). Enterprises in the region function without a defined code of conduct, conventions, regulations, or enforceable laws, complicating the ability of individuals to work in such a detrimental environment.
Income inequality: When the gap between the affluent and the destitute widens over time, income inequality arises, representing a detrimental condition for society as it requires considerable time to rectify (Ghani and O’Connell 2016). The United Arab Emirates faces a similar challenge, with the poor becoming increasingly impoverished while the wealthy continue to amass greater fortunes, resulting in severe economic repercussions. The absence of a system to facilitate equitable wealth distribution exacerbates this issue, rendering it more complex and challenging.
Trade policies are legislative measures designed to facilitate business expansion into new markets and promote substantial growth through international trade (Su, Zhang and Su 2015). The United Arab Emirates has established various protocols to ensure comprehensive scrutiny, detailed below.
Intellectual Property Theft: Trade policies facilitate intellectual property theft by enabling corporations to penetrate new markets and adapt to evolving business conditions. This allows businesses to appropriate others' inventions, creativity, ideas, or strategies, posing significant risks to nations such as the United Arab Emirates (Daleure 2017).
Economic warfare refers to a strategy employed by one nation to undermine the economy of another. The United Arab Emirates utilizes this approach to destabilize the economic frameworks of other industrialized countries, thereby facilitating its own future growth and prosperity (Jensen 2018).
Thereby to conclude, international trade financing and investment are among the most important components, as it helps businesses expand into new markets and is thus very important in the long run. In the current market climate, the financial market, as well as its connected instruments and procedures, are extremely important and each of them must be thoroughly understood so that they can contribute to the firm's worth rather than detract from it. Countries with efficient international trade are thriving and flourishing and have the ability to dominate the global economy. The Financial market is essential in the current time. It has the ability to develop and evolve a nation's productivity and performance in a favourable way. The financial market is a locus in which deals of financial securities, including all forms of equities, debentures, bonds and so on, are done on a regular basis. Apart from that, United Arab Emirates' economy is largely based on the commodity because it is among the world's greatest producers and exporters of oil and its derivatives. It has a mixed market free economy based on natural gas and oil production in the industry. The economies of the United Kingdom and the United Arab Emirates are doing well. While there are certain areas of worry, they are still far ahead of the pack.
Accominotti, O. and Ugolini, S., 2019. International trade finance from the origins to the present: market structures, regulation, and governance.
Ahn, J., 2020. A theory of domestic and international trade finance. Emerald Publishing Limited.
Aktas, N., Andreou, P.C., Karasamani, I. and Philip, D., 2019. CEO duality, agency costs, and internal capital allocation efficiency. British Journal of Management, 30(2), pp.473-493.
Alshamsi, R. and Saeed, S., 2018. Evaluation of migration governance in the United Arab Emirates (Doctoral dissertation, Durham University).
Banerjee, R., Devereux, M.B. and Lombardo, G., 2016. Self-oriented monetary policy, global financial markets and excess volatility of international capital flows. Journal of International Money and Finance, 68, pp.275-297.
Bauer, D. and Zanjani, G., 2016. The marginal cost of risk, risk measures, and capital allocation. Management Science, 62(5), pp.1431-1457.
Bhogal, T. and Trivedi, A., 2019. International trade and inherent risks. In International Trade Finance (pp. 1-3). Palgrave Macmillan, Cham.
Bouët, A. and Vaubourg, A.G., 2016. Financial constraints and international trade with endogenous mode of competition. Journal of Banking & Finance, 68, pp.179-194.
Burton, J., 2020. Supporting entrepreneurs when it matters: optimising capital allocation for impact. Journal of Entrepreneurship and Public Policy.
Bustos, P., Garber, G. and Ponticelli, J., 2016. Capital allocation across sectors: Evidence from a boom in agriculture. Banco Central do Brasil (414).
Caballero, J., Candelaria, C. and Hale, G., 2018. Bank linkages and international trade. Journal of International Economics, 115, pp.30-47.
Daleure, G., 2017. UAE Goes Global. In Emiratization in the UAE Labor Market (pp. 7-26). Springer, Singapore.
Faccio, M., Marchica, M.T. and Mura, R., 2016. CEO gender, corporate risk-taking, and the efficiency of capital allocation. Journal of corporate finance, 39, pp.193-209.
Fischer, C., Payment Contracts and Trade Finance in Export Relationships.
Ghani, E. and O’Connell, S.D., 2016. Can services be a growth escalator in low-income countries?. Revue deconomie du developpement, 24(2), pp.143-173.
Jensen, S., 2018. Policy Implications of the UAE’s economic diversification strategy: prioritizing national objectives. In Economic Diversification in the Gulf Region, Volume II (pp. 67-88). Palgrave Macmillan, Singapore.
Li, L. and Xing, H., 2018. Capital allocation under the Fundamental Review of Trading Book. arXiv preprint arXiv:1801.07358.
Maggiori, M., Neiman, B. and Schreger, J., 2018. International currencies and capital allocation (No. w24673). National Bureau of Economic Research.
Manda, M.I. and Ben Dhaou, S., 2019, April. Responding to the challenges and opportunities in the 4th Industrial revolution in developing countries. In Proceedings of the 12th International Conference on Theory and Practice of Electronic Governance (pp. 244-253).
Niepmann, F. and Schmidt-Eisenlohr, T., 2017. International trade, risk and the role of banks. Journal of International Economics, 107, pp.111-126.
Nuhoho, S., Saad, A., Saumell, G., Ribes, D. and El Khoury, A.C., 2018. Economic evaluation of paliperidone palmitate once monthly for treating chronic schizophrenia patients in the United Arab Emirates. Current medical research and opinion, 34(4), pp.601-611.
Said, K., 2016. A risk management approach to capital allocation. Les Houches.
Small, E.P. and Al Mazrooei, M., 2016. Evaluation of construction-specific provisions of sustainable design codes and standards in the United Arab Emirates. Procedia Engineering, 145, pp.1021-1028.
Su, Y., Zhang, P. and Su, Y., 2015. An overview of biofuels policies and industrialization in the major biofuel producing countries. Renewable and Sustainable Energy Reviews, 50, pp.991-1003.
Terzi, N., 2016. The impact of e-commerce on international trade and employment. In Encyclopedia of E-Commerce Development, Implementation, and Management (pp. 2271-2287). IGI Global.
Xu, M., David, J.M. and Kim, S.H., 2018. The fourth industrial revolution: Opportunities and challenges. International journal of financial research, 9(2), pp.90-95.
Zysman, J., 2018. Governments, markets, and growth. Cornell University Press.
Get original papers written according to your instructions and save time for what matters most.
Order Now
