How Significant Is Investor Confidence as a Crucial Factor Causing Capital Flight Across International Borders

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How significant is investor confidence as a crucial factor causing capital flight across international borders? Discuss. INTRODUCTION The positive impact of globalization is a new opportunity perceive by the investors around the world. In the perspective of investor, a country’s market will become small after sometime because there is so many competitors in it try to compete with each other for the sole objective create profits. Therefore, it is common for them to bring their business to another country to find new market and gain more profit. In regard to the effect of globalization, this has cause many country to improve their economy as what can be seen in US, India, Korea and many others as well. And globalization too has leading to increase investor confidence about their investment risk. As an investor, the investment risk is very important to properly consider before making decision because it will determine the success of their investment. In brief, according to IMF and World Bank, globalization is trade flows, investment flows and financial flows and extends to flows of technology, information and services across national boundaries. For Sociologist, globalization is a process in which social life within societies is increasingly affected by international influence bases on everything from political and trade ties to shared music, clothing and mass media. In the words of Malcolm Waters (1995), globalization is a social process in which the constraints of geography on social and cultural arrangements recede and in which people are becoming increasingly aware that they are receding. So basically, globalization is defined as "the trend towards increasing inter-relationships and integration among countries in the international economy through international trade, free markets, foreign direct investments, and capital mobility." in both social and
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