跨國財務(wù)管理概述課件

1Itcanbewell-knownthateconomicintegrationsweepsallovertheworld,corporateinternationalizationistheforegoneconclusionofeconomicintegration.Howcanyougetajobinthepreviouscorporations?1Itcanbewell-knownthateco2CourseMaterialsEunandResnick,2010,InternationalFinancialManagement,ChinaMachinePress,5thEdition(4rdEditionOK)ResourcesandReadingsinInternationalFinance:InternationalFinanceResources:

YahooFinance

ReadingsinInternationalFinance:

TheEconomist2CourseMaterialsEunandResni3CourseObjectiveItisanewfieldofmoderntimescorporationfinancialmanagement.Toprovideaframeworkformakingcorporatefinancialdecisionsinaninternationalcontext.3CourseObjectiveItisanewf4GlobalizationForeignInvestmentDecisionsInternationalCapitalBudgetingSourcingCapitalinGlobalMarketsMultinationalCashManagementSynthesisCourseOverview4GlobalizationForeignInternati5RequirementsandGradingClassparticipationandCases(20%)FinalExam(80%)5RequirementsandGrading6Chapter1Globalization&the

MultinationalFirmChapterobjectives:Understandwhyitisimportanttostudyinternationalfinance.Distinguishinternationalfinancefromdomesticfinance.6Chapter1Globalization&the7What’smultinationalfinance？

What’sSpecialaboutmultinationalFinance?Whydoweneedtostudyfinancialmanagementofmultinationalfirm?GoalsforInternationalFinancialManagementGlobalizationoftheWorldEconomyMultinationalCorporationsOutline7What’smultinationalfinance？8KeywordsForeignexchangeriskPoliticalriskMarketimperfectionExpandedopportunitysetMultinationalcorporation(MNC)外匯風(fēng)險政治風(fēng)險市場不完善跨國公司擴(kuò)大的市場機(jī)遇8KeywordsForeignexchangeris91.What’smultinationalfinance？

Financialmanagementismainlyconcernedwithhowtooptimallymakevariouscorporatefinancialdecisions,suchasthosepertainingtoinvestment,financing,dividendpolicy,andworkingcapitalmanagement,withaviewtoachievingasetofgivencorporateobjectives.Multinationalfinanceisconcernedwithfinancialmanagementinaninternationalsetting.91.What’smultinationalfinan102.What’sSpecialabout

multinationalFinance?2.1ForeignExchangeRiskTheriskthatforeigncurrencyprofitsmayevaporateindollartermsduetounanticipatedunfavorableexchangeratemovements.Suppose$1=￥100andyoubuy10sharesofToyotaat￥1,000pershare.Oneyearlatertheinvestmentisworthtenpercentmoreinyen:￥11,000But,iftheyenhasdepreciatedto$1=￥120,yourinvestmenthasactuallylostmoneyindollarterms.102.What’sSpecialabout

mu112.2PoliticalRiskPoliticalriskrangesfromunexpectedchangesintaxrulestooutrightexpropriationofassetsheldbyforeigners.Sovereigngovernmentshavetherighttoregulatethemovementofgoods,capital,andpeopleacrosstheirborders.Theselawssometimeschangeinunexpectedways.What’sSpecialabout

multinationalFinance?112.2PoliticalRiskWhat’sSp12What’sSpecialabout

InternationalFinance?2.3MarketImperfections

Legalrestrictionsonmovementofgoods,people,andmoneyTransactionscostsShippingcostsDiscriminationtaxationMarketImperfectionsrepresentvariousfrictionandimpedimentspreventingmarketsfromfunctioningperfectly.12What’sSpecialabout

InternTheExampleofNestlé’sMarketImperfectionNestléusedtoissuetwodifferentclassesofcommonstockbearersharesandregisteredshares.Foreignerswereonlyallowedtobuybearershares.Swisscitizenscouldbuyregisteredshares.Thebearerstockwasmoreexpensive.OnNovember18,1988,Nestléliftedrestrictionsimposedonforeigners,allowingthemtoholdregisteredsharesaswellasbearershares.TheExampleofNestlé’sMarketNestlé’sForeignOwnershipRestrictions12,00010,0008,0006,0004,0002,000011203191824Source:FinancialTimes,November26,1988p.1.Adaptedwithpermission.SFBearershareRegisteredshareNestlé’sForeignOwnershipResTheExampleofNestlé’sMarketImperfectionFollowingthis,thepricespreadbetweenthetwotypesofsharesnarroweddramatically.ThisimpliesthattherewasamajortransferofwealthfromforeignshareholderstoSwissshareholders.ForeignersholdingNestlébearershareswereexposedtopoliticalriskinacountrythatiswidelyviewedasahavenfromsuchrisk.TheNestléepisodeillustratesboththeimportanceofconsideringmarketimperfectionsandtheperilofpoliticalrisk.TheExampleofNestlé’sMarket162.4ExpandedOpportunitySet

Whenfirmsorindividualinvestorsventureintothearenaofglobalmarkets,theycanbenefitfromanexpandedopportunityset.Firmscanlocateproductioninanycountryorregionoftheworldtomaximizetheirperformanceandraisefundsinanycapitalmarketwherethecostofcapitalisthelowest.Inaddition,firmscangainfromgreatereconomiesofscalewhentheirtangibleandintangibleassetsaredeployedonaglobalbasis.What’sSpecialabout

multinationalFinance?162.4ExpandedOpportunitySet173.Whydoweneedtostudyfinancialmanagementofmultinationalfirm?Highly

globalizedand

integrated

worldeconomy.ConsumptionProductionInvestmentItisthusessentialforfinancialmanagerstofullyunderstandvitalinternationaldimensionsoffinancialmanagement.173.Whydoweneedtostudyf18AmericanconsumersimportoilSaudiArabiaTVsetsJapanautomobilesGermanygarmentsChinashoesIndonesiapastaItalywineFranceexportaircraft,software,movies,jeans,wheat,andotherproducts18AmericanimportoilSaudiArabi19ProductionNike,aU.S.-basedcompanywithagloballyrecognizedbrandname,manufacturesathleticshoesinsuchAsiandevelopingcountriesasChina,Indonesia,andVietnamusingsubcontractors,andsellstheproductsintheU.S.andforeignmarkets.ThecompanyhasnoproductionfacilitiesintheUnitedStates.Inaword,MNCsrelentlesseffortstosourceinputsandlocateproductionanywhereintheworldwherecostsarelowerandprofitsarehigher.19ProductionNike,aU.S.-base20ProductionForexample,personalcomputerssoldintheworldmarketmighthavebeenassembledinMalaysiawithChinese-mademonitors,Korean-madekeyboards,U.S.-madechipsandpreinstalledsoftwarepackagesthatwerejointlydevelopedbyU.S.andIndianengineers.20ProductionForexample,per21InvestmentRecently,financialmarketshavealsobecomehighlyintegrated.Thisdevelopmentallowsinvestorstodiversifytheirinvestmentportfoliosinternationally.Let’sconsidercross-listing.Manymajorcorporationsoftheworld,suchasIBM,Sony,havetheirsharescross-listedonforeignstockexchanges,therebyrenderingtheirsharesinternationallytradableandgainingaccesstoforeigncapitalaswell.Forexample,Daimler-Benz,sventureinChinacanbefinancedpartlybyAmericaninvestorswhopurchaseDaimler-Benz’ssharestradedontheNewYorkStockExchange.21InvestmentRecently,financia22KeywordsCorporategovernanceTheGeneralAgreementonTariffsandTrade(GATT)TheWorldTradeOrganization(WTO)TheEuropeanUnion(EU)TheNorthAmericanFreeTradeAgreement(NAFTA)歐盟關(guān)貿(mào)總協(xié)定公司治理世界貿(mào)易組織北美自由貿(mào)易協(xié)定22KeywordsCorporategovernancThefocusofthetextistoequipthereaderwiththe“intellectualtoolbox”ofaneffectiveglobalmanager—butwhatgoalshouldthiseffectiveglobalmanagerbeworkingtoward?Maximizationofshareholderwealth?orOtherGoals?4.GoalsforInternationalFinancialManagementThefocusofthetextistoeq4.1MaximizeShareholderWealthLongacceptedasagoalintheAnglo-Saxoncountries,andtheultimategoalofinternationalfinancialmanagement.4.1MaximizeShareholderWealt4.2OtherGoalsInothercountriesshareholdersareviewedasmerelyoneamongmany“stakeholders”ofthefirmincluding:EmployeesSuppliersCustomersTheytendtoconsiderthepromotionofthefirm’sstakeholders’overallwelfareasthemostimportantcorporategoal.4.2OtherGoalsInothercount265.GlobalizationoftheWorldEconomyEmergenceofglobalizedfinancialmarketsEmergenceoftheeuroasaglobalcurrencyTradeliberalizationandeconomicintegration

Privatization265.GlobalizationoftheWorlDeregulationofFinancialMarketscoupledwithAdvancesinTechnologyhavegreatlyreducedinformationandtransactionscosts,whichhasledto:FinancialInnovations,suchasCurrencyfuturesandoptionsCross-borderstocklistingsInternationalmutualfunds5.1EmergenceofGlobalized

FinancialMarketsDeregulationofFinancialMark5.2EmergenceoftheEuroasaGlobalCurrencyAmomentouseventinthehistoryofworldfinancialsystems.Currentlymorethan300millionEuropeansin28countriesareusingthecommoncurrencyonadailybasis.1歐元=8.5629人民幣元1歐元=1.3797美元5.2EmergenceoftheEuroasa5.3TradeLiberalizationandEconomicIntegrationOverthepast50years,internationaltradeincreasednearlythreetimesasfastasworldGDP.Eventheonce-protectionistandinward-lookingcountriesarenowincreasinglypursuingfree-marketandopen-economypoliciesbecauseofthegainsfrominternationaltrade.5.3TradeLiberalizationandE5.3TradeLiberalizationandEconomicIntegrationTheGeneralAgreementonTariffsandTrade(GATT)amultilateralagreementamongmembercountrieshasreducedmanybarrierstotrade.TheWorldTradeOrganizationhasthepowertoenforcetherulesofinternationaltrade.5.3TradeLiberalizationandEEU&NAFTAOnregionallevel,formalarrangementamongcountrieshavebeeninstitutedtopromoteeconomicintegration.TheEU(EuropeanUnion)includes28memberstatesthathaveeliminatedbarrierstothefreeflowofgoods,capital,andpeople.TheNorthAmericanFreeTradeAgreement(NAFTA)callsforphasingoutimpedimentstotradebetweenCanada,MexicoandtheUnitedStatesovera15-yearperiod.EU&NAFTAOnregionallevel,f

5.4Privatization

Thesellingoffstate-runenterprisestoinvestorsisalsoknownas“Denationalization”.Oftenseeninsocialisteconomiesintransitiontomarketeconomies.Bymostestimatesthisincreasestheefficiencyoftheenterprise.Oftenspursatremendousincreaseincross-borderinvestment.

5.4Privatization

Theselli336.MultinationalCorporations

Thereareabout60,000MNCsintheworldwithover500,000foreignaffiliates.Amultinationalcorporation(MNC)canbedefinedasabusinessfirmincorporatedinonecountrythathasproductionandsalesoperationsinseveralothercountries.336.MultinationalCorporation34MultinationalCorporations

ManyMNCsobtainrawmaterialsfromonenationalmarket,financialcapitalfromanother,producegoodswithlaborandcapitalequipmentinathirdcountryandselltheiroutputinvariousothernationalmarkets.WhichfamousMNCsdoyouknow?34MultinationalCorporationsM35Top10MNCsin2002(billionofdollars)35Top10MNCsin2002(billion36ThewaysinwhichMNCsgainEconomyofscaleSpreadingR&Dexpendituresandadvertisingcostsovertheirglobalsales;Poolingglobalpurchasingpoweroversuppliers;Utilizingtheirtechnologicalandmanagerialknow-howgloballywithminimumadditioncosts,andsoforth.36ThewaysinwhichMNCsgainE37ThewaysinwhichMNCsgainGlobaloperationMNCscanusetheirglobalpresencetotakeadvantageofunderpricedlaborservicesavailableincertaindevelopingcountries,andgainaccesstospecialR&Dcapabilitiesresidinginadvancedcountries.37ThewaysinwhichMNCsgainG38Questions1.Howisinternationalfinancialmanagementdifferentfromdomesticfinancialmanagement?

?38Questions1.Howisinternat39Questions2.Whataremultinationalcorporations(MNCs)?39Questions2.Whataremultina

What’sSpecialabout“International”Finance?

1.Whatmajordimensionsetsapartinternationalfinancefromdomesticfinance?a)foreignexchangeandpoliticalrisksb)Marketimperfectionsc)Expandedopportunitysetd)alloftheaboveAnswer:d40

What’sSpecialabout“Interna2.Anexampleofapoliticalriskisa)Expropriationofassetsb)Adversechangeintaxrulesc)Theoppositionpartybeingelectedd)a)andb)arebothcorrectAnswer:d

412.Anexampleofapoliticalri3.Productionofgoodsandserviceshasbecomeglobalizedtoalargeextentasaresultofa)Skilledlaborbeinghighlymobileb)Naturalresourcesbeingdepletedinonecountryafteranotherc)Multinationalcorporations’effortstosourceinputsandlocateproductionanywherewherecostsarelowerandprofitshigherd)CommontastesworldwideforthesamegoodsandservicesAnswer:c423.Productionofgoodsandserv4.Supposeyourfirminvests$100,000inaprojectinItaly.Atthetimetheexchangerateis$1.25=€1.00.Oneyearlatertheexchangerateisthesame,buttheItaliangovernmenthasexpropriatedyourfirm’sassetspayingonly€80,000incompensation.Thisisanexampleofa)Exchangerateriskb)Politicalriskc)Marketimperfectionsd)Noneoftheabove,since$100,000=€80,000×$1.25/€1.00Answer:b)434.Supposeyourfirminvests$15.Mostgovernmentsatleasttrytomakeitdifficultforpeopletocrosstheirbordersillegally.Thisbarriertothefreemovementoflaborisanexampleofa)Informationasymmetryb)Excessivetransactionscostsc)Racialdiscriminationd)AmarketimperfectionAnswer:d)445.Mostgovernmentsatleasttr6.Whenindividualinvestorsbecomeawareofoverseasinvestmentopportunitiesandarewillingtodiversifytheirportfoliosinternationally,a)theytradeonemarketimperfection,informationasymmetry,foranother,exchangeraterisk.b)theybenefitfromanexpandedopportunityset.c)Theyshouldnotbothertoreadortounderstandtheprospectus,sinceitsprobablywritteninaforeignlanguaged)Theyshouldinvestonlyindollarsoreuros.Answer:b

456.Whenindividualinvestorsbe7.Nestlé,awell-knownSwisscorporation,a)Hasbeenaparagonofvirtueinitsoppositiontoallformsofpoliticalrisk.b)Atonetimeplacedrestrictionsonforeignownershipofitsstock.Whenitrelaxedtheserestrictions,thetotalmarketvalueofthefirmfell.c)Atonetimeplacedrestrictionsonforeignownershipofitsstock.Whenitrelaxedtheserestrictions,therewasamajortransferofwealthfromforeignshareholderstoSwissshareholders.d)NoneoftheaboveAnswer:c)467.Nestlé,awell-knownSwissc8.Thegoalofshareholderwealthmaximizationa)isnotappropriatefornon-U.S.businessfirmsb)meansthatallbusinessdecisionsandinvestmentsthatafirmmakesaredoneforthepurposeofmakingtheownersofthefirmbetterofffinanciallyc)isasub-objectivethefirmshouldattempttoachieveaftertheobjectiveofcustomersatisfactionismetd)isinconflictwiththeprivatizationprocesstakingplaceinthird-worldcountriesAnswer:b478.Thegoalofshareholderweal9.RecentcorporatescandalsatfirmssuchasEnron,WorldComandtheItalianfirmParmalata)Showthatmanagersmightbetemptedtopursuetheirownprivateinterestsattheexpenseofshareholders.b)ShowthatItalianshareholdersarebetteratmonitoringmanagerialbehaviorthanU.S.shareholders.c)Showthatwhite-collarcriminalshardlyevergetpunished.d)Showthatsocialismisabetterwaytogothancapitalism.Answera)

489.Recentcorporatescandalsat10.WhilethecorporategovernanceproblemisnotconfinedtotheUnitedStates,a)Itcanbeamuchmoreseriousprobleminmanyotherpartsoftheworld,wherelegalprotectionofshareholdersisweakornonexistent.b)IthasreacheditshighpointintheUnitedStates.c)TheU.S.legalsystem,withlawsuitsusedonlyasalastresort,ensuredthatanyconflictsofinterestwillsoonbeathingofthepast.d)NoneoftheaboveAnswer:a)4910.Whilethecorporategoverna11.Theownersofabusinessarethea)Taxpayersb)Workersc)Suppliersd)ShareholdersAnswer:d)5011.Theownersofabusinessar12.Themassiveprivatizationthatiscurrentlytakingplaceinformerlysocialistcountries,willlikelya)eventuallyenhancethestandardoflivingtothesecountries’citizensb)dependonprivateinvestmentc)increasetheopportunitysetfacingthesecountries’citizensd)alloftheaboveAnswer:d)5112.Themassiveprivatizationt13.Whencorporategovernancebreaksdowna)Shareholdersareunlikelytoreceivefairreturnsontheirinvestmentsb)Managersmaybetemptedtoenrichthemselvesatshareholderexpensec)Theboardofdirectorsisnotdoingitsjobd)AlloftheaboveAnswer:d)5213.Whencorporategovernanceb14.AMNCmaygainfromitsglobalpresencebya)SpreadingR&Dexpendituresandadvertisingcostsovertheirglobalsalesb)Poolingglobalpurchasingpoweroversuppliersc)Utilizingtheirtechnologicalandmanagerialknow-howgloballywithminimumadditionalcostsd)Alloftheabovearepotentialgains.Answer:d)5314.AMNCmaygainfromitsglo15.AMNCcana)Beafactorthatincreasestheopportunitiesofthecitizensoflessdevelopedcountriesb)Beafactorthatincreasestheopportunitysetofdomesticinvestorsc)Increaseeconomicefficiencyd)Alloftheabove.Answer:d)5415.AMNCcan5416.AtrueMNC,withoperationsindozensofdifferentcountriesa)Musteffectivelymanageforeignexchangeriskb)Canignoreforeignexchangerisksinceitisdiversifiedc)Willpaytaxesinonlyitshomecountyd)Noneoftheabove.Answer:a)

5516.AtrueMNC,withoperations17.Apurelydomesticfirmsourcesitsproducts,sellsitsproducts,andraisesitsfundsdomesticallya)Canfacestiffcompetitionfromamultinationalcorporationthatcansourceitsproductsinonecountry,selltheminseveralcountries,andraiseitsfundsinathirdcountry.b)CanbemorecompetitivethanaMNConitshometurfduetosuperiorknowledgeofthelocalmarketc)Canstillfaceexchangeraterisk,justlikeaMNCd)Alloftheabovearetrue.Answer:d5617.Apurelydomesticfirmsour57Itcanbewell-knownthateconomicintegrationsweepsallovertheworld,corporateinternationalizationistheforegoneconclusionofeconomicintegration.Howcanyougetajobinthepreviouscorporations?1Itcanbewell-knownthateco58CourseMaterialsEunandResnick,2010,InternationalFinancialManagement,ChinaMachinePress,5thEdition(4rdEditionOK)ResourcesandReadingsinInternationalFinance:InternationalFinanceResources:

YahooFinance

ReadingsinInternationalFinance:

TheEconomist2CourseMaterialsEunandResni59CourseObjectiveItisanewfieldofmoderntimescorporationfinancialmanagement.Toprovideaframeworkformakingcorporatefinancialdecisionsinaninternationalcontext.3CourseObjectiveItisanewf60GlobalizationForeignInvestmentDecisionsInternationalCapitalBudgetingSourcingCapitalinGlobalMarketsMultinationalCashManagementSynthesisCourseOverview4GlobalizationForeignInternati61RequirementsandGradingClassparticipationandCases(20%)FinalExam(80%)5RequirementsandGrading62Chapter1Globalization&the

MultinationalFirmChapterobjectives:Understandwhyitisimportanttostudyinternationalfinance.Distinguishinternationalfinancefromdomesticfinance.6Chapter1Globalization&the63What’smultinationalfinance？

What’sSpecialaboutmultinationalFinance?Whydoweneedtostudyfinancialmanagementofmultinationalfirm?GoalsforInternationalFinancialManagementGlobalizationoftheWorldEconomyMultinationalCorporationsOutline7What’smultinationalfinance？64KeywordsForeignexchangeriskPoliticalriskMarketimperfectionExpandedopportunitysetMultinationalcorporation(MNC)外匯風(fēng)險政治風(fēng)險市場不完善跨國公司擴(kuò)大的市場機(jī)遇8KeywordsForeignexchangeris651.What’smultinationalfinance？

Financialmanagementismainlyconcernedwithhowtooptimallymakevariouscorporatefinancialdecisions,suchasthosepertainingtoinvestment,financing,dividendpolicy,andworkingcapitalmanagement,withaviewtoachievingasetofgivencorporateobjectives.Multinationalfinanceisconcernedwithfinancialmanagementinaninternationalsetting.91.What’smultinationalfinan662.What’sSpecialabout

multinationalFinance?2.1ForeignExchangeRiskTheriskthatforeigncurrencyprofitsmayevaporateindollartermsduetounanticipatedunfavorableexchangeratemovements.Suppose$1=￥100andyoubuy10sharesofToyotaat￥1,000pershare.Oneyearlatertheinvestmentisworthtenpercentmoreinyen:￥11,000But,iftheyenhasdepreciatedto$1=￥120,yourinvestmenthasactuallylostmoneyindollarterms.102.What’sSpecialabout

mu672.2PoliticalRiskPoliticalriskrangesfromunexpectedchangesintaxrulestooutrightexpropriationofassetsheldbyforeigners.Sovereigngovernmentshavetherighttoregulatethemovementofgoods,capital,andpeopleacrosstheirborders.Theselawssometimeschangeinunexpectedways.What’sSpecialabout

multinationalFinance?112.2PoliticalRiskWhat’sSp68What’sSpecialabout

InternationalFinance?2.3MarketImperfections

Legalrestrictionsonmovementofgoods,people,andmoneyTransactionscostsShippingcostsDiscriminationtaxationMarketImperfectionsrepresentvariousfrictionandimpedimentspreventingmarketsfromfunctioningperfectly.12What’sSpecialabout

InternTheExampleofNestlé’sMarketImperfectionNestléusedtoissuetwodifferentclassesofcommonstockbearersharesandregisteredshares.Foreignerswereonlyallowedtobuybearershares.Swisscitizenscouldbuyregisteredshares.Thebearerstockwasmoreexpensive.OnNovember18,1988,Nestléliftedrestrictionsimposedonforeigners,allowingthemtoholdregisteredsharesaswellasbearershares.TheExampleofNestlé’sMarketNestlé’sForeignOwnershipRestrictions12,00010,0008,0006,0004,0002,000011203191824Source:FinancialTimes,November26,1988p.1.Adaptedwithpermission.SFBearershareRegisteredshareNestlé’sForeignOwnershipResTheExampleofNestlé’sMarketImperfectionFollowingthis,thepricespreadbetweenthetwotypesofsharesnarroweddramatically.ThisimpliesthattherewasamajortransferofwealthfromforeignshareholderstoSwissshareholders.ForeignersholdingNestlébearershareswereexposedtopoliticalriskinacountrythatiswidelyviewedasahavenfromsuchrisk.TheNestléepisodeillustratesboththeimportanceofconsideringmarketimperfectionsandtheperilofpoliticalrisk.TheExampleofNestlé’sMarket722.4ExpandedOpportunitySet

Whenfirmsorindividualinvestorsventureintothearenaofglobalmarkets,theycanbenefitfromanexpandedopportunityset.Firmscanlocateproductioninanycountryorregionoftheworldtomaximizetheirperformanceandraisefundsinanycapitalmarketwherethecostofcapitalisthelowest.Inaddition,firmscangainfromgreatereconomiesofscalewhentheirtangibleandintangibleassetsaredeployedonaglobalbasis.What’sSpecialabout

multinationalFinance?162.4ExpandedOpportunitySet733.Whydoweneedtostudyfinancialmanagementofmultinationalfirm?Highly

globalizedand

integrated

worldeconomy.ConsumptionProductionInvestmentItisthusessentialforfinancialmanagerstofullyunderstandvitalinternationaldimensionsoffinancialmanagement.173.Whydoweneedtostudyf74AmericanconsumersimportoilSaudiArabiaTVsetsJapanautomobilesGermanygarmentsChinashoesIndonesiapastaItalywineFranceexportaircraft,software,movies,jeans,wheat,andotherproducts18AmericanimportoilSaudiArabi75ProductionNike,aU.S.-basedcompanywithagloballyrecognizedbrandname,manufacturesathleticshoesinsuchAsiandevelopingcountriesasChina,Indonesia,andVietnamusingsubcontractors,andsellstheproductsintheU.S.andforeignmarkets.ThecompanyhasnoproductionfacilitiesintheUnitedStates.Inaword,MNCsrelentlesseffortstosourceinputsandlocateproductionanywhereintheworldwherecostsarelowerandprofitsarehigher.19ProductionNike,aU.S.-base76ProductionForexample,personalcomputerssoldintheworldmarketmighthavebeenassembledinMalaysiawithChinese-mademonitors,Korean-madekeyboards,U.S.-madechipsandpreinstalledsoftwarepackagesthatwerejointlydevelopedbyU.S.andIndianengineers.20ProductionForexample,per77InvestmentRecently,financialmarketshavealsobecomehighlyintegrated.Thisdevelopmentallowsinvestorstodiversifytheirinvestmentportfoliosinternationally.Let’sconsidercross-listing.Manymajorcorporationsoftheworld,suchasIBM,Sony,havetheirsharescross-listedonforeignstockexchanges,therebyrenderingtheirsharesinternationallytradableandgainingaccesstoforeigncapitalaswell.Forexample,Daimler-Benz,sventureinChinacanbefinancedpartlybyAmericaninvestorswhopurchaseDaimler-Benz’ssharestradedontheNewYorkStockExchange.21InvestmentRecently,financia78KeywordsCorporategovernanceTheGeneralAgreementonTariffsandTrade(GATT)TheWorldTradeOrganization(WTO)TheEuropeanUnion(EU)TheNorthAmericanFreeTradeAgreement(NAFTA)歐盟關(guān)貿(mào)總協(xié)定公司治理世界貿(mào)易組織北美自由貿(mào)易協(xié)定22KeywordsCorporategovernancThefocusofthetextistoequipthereaderwiththe“intellectualtoolbox”ofaneffectiveglobalmanager—butwhatgoalshouldthiseffectiveglobalmanagerbeworkingtoward?Maximizationofshareholderwealth?orOtherGoals?4.GoalsforInternationalFinancialManagementThefocusofthetextistoeq4.1MaximizeShareholderWealthLongacceptedasagoalintheAnglo-Saxoncountries,andtheultimategoalofinternationalfinancialmanagement.4.1MaximizeShareholderWealt4.2OtherGoalsInothercountriesshareholdersareviewedasmerelyoneamongmany“stakeholders”ofthefirmincluding:EmployeesSuppliersCustomersTheytendtoconsiderthepromotionofthefirm’sstakeholders’overallwelfareasthemostimportantcorporategoal.4.2OtherGoalsInothercount825.GlobalizationoftheWorldEconomyEmergenceofglobalizedfinancialmarketsEmergenceoftheeuroasaglobalcurrencyTradeliberalizationandeconomicintegration

Privatization265.GlobalizationoftheWorlDeregulationofFinancialMarketscoupledwithAdvancesinTechnologyhavegreatlyreducedinformationandtransactionscosts,whichhasledto:FinancialInnovations,suchasCurrencyfutu