In the following period he can once again make purchases equal to his income and thus need not suffer a reduction in his living standards. The implication here is that non-debt capital flows may be less problematic than international loans because they may not require a reduction in living standards in the future. Of course, in this case there is an additional concern that the country which sells off its assets may also be losing control of its productive assets and thus its citizens will not be the ones to earn positive returns on these domestic activities. This concern should be tempered for a few reasons. First, foreign owned firms remain subject to the laws of the domestic country.
Countries can prevent exorbitant profit taking by applying profit taxes.
What's more, the foreign owners do not enjoy voting privileges and thus have less say over laws that might affect them. Second, foreign owned firms generate employment opportunities for domestic citizens which serves to benefit the country. Finally, owners of firms, whether foreign or domestic, are generally motivated by the same desire, namely to make the business successful, and successful businesses generally benefit the owners the employees and the consumers of the product. As an example consider the purchase in the 1980s of Rockefeller Center in New York City by a group of Japanese investors. Rockefeller Center is a centrally located building in NYC whose owners lease office space to businesses that wish to locate their offices there.