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Finance in a Globalized World - Coggle Diagram
Finance in a Globalized World
Economic and financial flows in a globalized world
Balance of payments (BoP) – Tracks economic transactions between countries
Current account – Trade in goods/services, investment income, and transfers.
Capital and financial accounts – Foreign direct investments (FDI), portfolio investments, and reserves.
Global imbalances
Role of multinational corporations
Supply chains and globalization – Companies operate across borders, requiring financial and risk management
Trade policies and global competition – Comparative advantage, tariffs, and free trade agreements impact business opportunities
Tax Considerations and Exchange Rates
Exchange rate systems – Floating vs. fixed rates
Currency risk and hedging – Businesses protect against currency fluctuations using financial instruments.
Transfer pricing and tax avoidance
Financial regulation and tax compliance
Financial regulation and global trade
Differences in financial rules – The US follows GAAP, while many countries use IFRS
Central banks and monetary policies – Governments intervene to stabilize financial markets
Investor protection
Fundamentals of international financial reporting
Standardization of financial reports – IFRS ensures global comparability
Impact on investors and businesses – Helps cross-border investments by providing clear financial data
Jurisdictional differences
International marketing and financial decisions
Market entry strategies. Exporting, franchising, and joint ventures affect financial planning
Consumer behavior in global markets
Adapting products for international markets
Pricing and exchange rate risks
Currency fluctuations affect pricing strategies and profitability