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Academic Journal of Business & Management, 2020, 2(1); doi: 10.25236/AJBM.2020.020111.

The Influence of Investment Rights and Interests on the Pricing Mechanism of International Trade Based on Mathematical Model

Author(s)

Huizhen Long

Corresponding Author:
Huizhen Long
Affiliation(s)

School of Arts and Science, Columbia University, 116th St & Broadway, New York, NY 10027, USA
E-mail: [email protected]

Abstract

To further know the impact of investment rights and interests on international trade pricing of resource products and the internal mechanism, the relationship between investment rights and pricing of international trade of resource-based products was studied by constructing mathematical model. The pricing mechanism is studied by analyzing investment rights, futures market, negotiation mechanism, trade intermediary, and characteristics of resource-based products. The results showed that the investment rights and interests were obtained through foreign direct investment. Those who have the ownership of investment rights and interests could have the weight of game in the process of negotiation, and then have a greater voice, which is directly reflected in the right of control or income for the exploitation, distribution, and transportation of the invested resource-based products. The role of investment rights and interests in international trade pricing is a supplementary mechanism of trade intermediary. There is a maximum effect of investment equity on pricing power of trade products. Beyond the critical point, pricing power will be affected, because the investor role changes to the seller role. In a word, to a certain extent, increasing investment rights and interests can have a certain impact on the pricing of resource products. Foreign investment rights and interests are vital in national strategy and social stability. The impact of investment rights and interests on pricing mechanism is mainly realized through discourse power and product allocation power. The research on the impact of investment rights and interests on the pricing mechanism of international trade has a positive significance for the follow-up research.

Keywords

investment rights and interests; pricing; trade; futures

Cite This Paper

Huizhen Long. The Influence of Investment Rights and Interests on the Pricing Mechanism of International Trade Based on Mathematical Model. Academic Journal of Business & Management (2020) Vol. 2, Issue 1: 100-111. https://doi.org/10.25236/AJBM.2020.020111.

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