‘Direct’ Balance-of-Payments Effects

  • Sanjaya Lall
  • Paul Streeten


The ‘direct’ balance-of-payments effects of a firm (B d ), defined as those which immediately affect the foreign exchanges, may be derived thus:
  • where X = f.o.b. value of exports;

  • I = inflows of equity capital and loans from abroad, including earnings retained out of profits, net of capital and loans repatriated;

  • C k = c.i.f. value of capital goods imported;

  • C r = c.i.f. value of raw materials and intermediate goods imported (excluding finished goods imported for resale);

  • R = royalties and technical fees paid abroad after tax; and

  • D = net after-tax profits and interest accruing abroad, including retained earnings.


Host Country Foreign Firm Parent Company Sample Firm Transfer Price 
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Copyright information

© Sanjaya Lall and Paul Streeten 1977

Authors and Affiliations

  • Sanjaya Lall
    • 1
  • Paul Streeten
    • 2
  1. 1.Institute of Economics and StatisticsOxfordUK
  2. 2.Queen Elizabeth House and Institute of Commonwealth StudiesOxfordUK

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