Please enable JavaScript.
Coggle requires JavaScript to display documents.
Globalization and the Multinational Firm - Coggle Diagram
Globalization and the Multinational
Firm
Special about International Finance
Why do we need to study international finance
Globalization requires the study of international finance.
An important tool to find the exchange rates
An important part of financial economics
Special about International Finance
Political risk
Market imperfections
Foreign exchange risk
Expanded opportunity sets
Globalization of the World Economy
major trends
commercialization capacitors
financial globalization
Climate change
changes in production and labor market
Rapid advancement in technology
resource globalization
developments
advantages
disadvantages
Multinational Corporations
Multinational Corporations profit
Benefit from economies of scale
aggregate global purchasing power compared to suppliers
use their technology and management knowledge globally with minimal additional costs
Allocation of R&D and advertising costs across their global sales
their global conservation
take advantage of lower prices and labor services available in some developing countries
access to exceptional R&D capabilities in advance countries abroad
Features of multinational corporations
Huge assets and turnover
International Operations through a network of branches
Unity of control
Mighty economic power
advanced and sophisticated technology
professional management
aggressive advertising and marketing
Better quality of products
Goals for International Financial Management
Basic objective
Maximizing shareholder wealth
It is a long-term goal
one of the most important goals of international financial management
Secondary objective
Forex risk management
Political risk management
optimal interest rate
Proper tax planning
Make effective use of the extended set of opportunities
Effective inflation risk management
Maximize shareholder value: