國際關(guān)系課件An-Introduction-to-Multinational-Finance

1、IOverview and BackgroundIIThe International Financial EnvironmentIIIDerivative Securities for Hedging Currency RiskIVManaging the Risks of Multinational OperationsVValuation and the Structure of Multinational OperationsVIInternational Portfolio Investment and Asset PricingMultinational Financeby Kir

2、t C. ButlerMultinational financial management is financial management conducted in more than one cultural, social, economic, or political environmentWell develop a framework for evaluating the opportunities, costs and risks of operating in the worlds markets for goods, services, and financial assets

3、 and liabilitiesChapter 1An Introduction to Multinational FinanceChallenges facing themultinational managerThe gentle reader will never, never know what a consummate ass he can become, until he goes abroad.Mark TwainViv la differenceCross-border differences can affect all areas of business, particul

4、arly through differences in - Language & culture- Human resource management- Accounting- Marketing - Distribution- Logistics- Financial markets- Corporate governance- Other business conventions(legal, accounting, taxation, regulation, etc.)where the art residesThe notes I handle no better than many

5、pianists, but the pauses between the notes ah, that is where the art resides. Arthur SchnabelMultinational financial managementMultinational finance is interdisciplinary within the field of financeMultinational financial managers must be familiar withForeign exchange and Eurocurrency marketsDerivati

6、ves securitiesInternational financial (debt & equity) marketsInternational markets for real assetsInternational portfolio investmentThe approach of the bookEverything should be madeas simple as possible,but not simpler.Albert EinsteinValue = St ECFt / (1+it)tMultinational investment policyHigher ret

7、urns from existing investmentsNew investment opportunitiesMultinational financial policyReduced capital costs through access to international capital marketsThe MNCs opportunitiesPerfect financial market assumptionsFinancial opportunities often involve a violation of one of these assumptionsFriction

8、less marketsNo government intervention or taxesNo transactions, agency, or bankruptcy costsRational investors Equal access to costless informationEqual access to market pricesFrictionless markets ensure operational efficiencyRational investors with equal access to markets and information ensure info

9、rmational efficiencyThat is, a market in which prices reflect all relevant informationTogether, these promote allocational efficiencyMarket efficiencyInvestment opportunitiesFinancing opportunitiesThe value of multinationalityThe MNCs additional risksCountry risk - the risk that the business environ

10、ment in a host country will unexpectedly changePolitical risk - the risk that the business environment in a host country will change unexpectedly due to political eventsFinancial risk - the risk of unexpected change in the financial or economic environment of a host countryRisk versus risk exposureR

11、isk exists whenever actual outcomes can differ from expectationsA company has a risk exposure when its value can change with unexpected changes in business conditionsForeign market entryExport or import entryAgents or distributors (foreign or domestic)Foreign sales branches or subsidiariesContract-b

12、ased entryLicensing or franchisingInvestment-based entryForeign direct investmentsMergers and acquisitionsStrategic alliances or joint venturesExport through agents or distributorsExport agents and distributors should have Technical knowledge of the productExperience, expertise, and marketing contac

13、ts in the foreign countryExperience and expertise in shipping, documentation, and trade creditReliability and financial stability Foreign sales branches/subsidiaries(versus agents or distributors)AdvantagesHigher sales potentialRetains control over production, marketing, distributionDisadvantagesHig

14、her resource commitmentSlower entry High country risks and costsContract-based entryAdvantagesquick and easylow resource commitmentlow cultural costs and risksavoids import and investment barriersDisadvantageslimited fees/royalties on license agreementsloss of control over production technologypoten

15、tial creation of competitorsInvestment-based entryAdvantagesPotential for higher sales Potential for lower costsDiversifies manufacturing base and matches foreign currency costs to revenuesAvoids import quotas and tariffsDisadvantagesHigher resource commitmentHigher exit costsMust overcome cultural

16、differencesMust overcome investment barriersInvestment-based entry International joint venturesMergers and acquisitionsFDI: plant expansionsFDI: new investmentSource: Ernst & YoungInvestment-based entryForeign direct investmentRelatively slow entryMaintains control over assetsCross-border M&ARelativ

17、ely rapid entry, but possibly at a high price (acquisition premium)Cross-border joint venturesMay avoid investment restrictionsLess exposure to country risksPotential loss of control over intellectual propertyGovernance of the MNCClaims on corporate revenues VEXPENSES +VGOVT+VDEBT+VEQUITY+VOTHER VREVENUESEXPENSESGOVTOT