Economic and financial investments are interdependent and concerned with the growth of organization by increasing productivity and generating revenues https://efinancemanagement.com/investment-decisions/economic-investment-vs-financial-investment

1. By:-
eFinanceManagement.com
https://efinancemanagement.com/investment-decisions/economic-investment-vs-financial-
investment
Economic Investment vs Financial
Investment

2. Content
1. Meaning
2. Differences
3. Importance
4. Reference

3. Meaning
1. Economic Investments:
It refers to the investment in all those items which are required for the production of goods and services. Examples of
economic investments are factories, equipment, etc. However it does not guarantee success.it aims to improve
productivity of company.
2. Financial Investments:
Financial investment refers to investing an asset with the goal of financial gain. Investment could be done in new asset or
old. It is broader concept and economic investments is a part of it.

4. Differences
1. Assets:
Economic investments is made only in real assets however, financial investment can be done in both real as well financial
assets.
2. Objective:
The aim of economic investment is to improve productivity while that of financial investment is to generate profits.
3. Scope:
Financial investment is a broader concept and economic investment is a part of it.
4. Examples:
Economic investment involves land, factories, machineries, etc. and financial investment includes investments in shares,
bonds, old or new lands, etc.
5. Suited for which company?
A developed company go for financial investment along with economic investments whereas a
company focused on improving productivity will go for economic investment.

5. Importance & Drawbacks
Importance:
Not only one but for the growth of an organization, both the investments are necessary. A few importance of both the
investments are highlighted below.
• Help a company grow and maintain stability.
• Both are interdependent to a certain extent.
• Earning from financial investment helps in making economic investments.
• And profits through economic investments will be used for financial investments.
Drawbacks:
Certain drawbacks of these investments are as follows.
• No guarantee of returns.
• Failure can directly impact profitability.

6. Reference
To know more about it, click on the link given below:
https://efinancemanagement.com/investment-decisions/economic-investment-vs-financial-investments