Chapter 5 The Theory of Trade and Investment 1 Learning Objectives To understand the traditional arguments of how and why international trade improves the welfare of all countries To review the history and compare the implications of trade theory from the original work of Adam Smith to the contemporary theories of Michael Porter To examine the criticisms of classical trade theory and examine alternative viewpoints of which business and economic forces determine trade patterns
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Investment Theory and Strategies A. Passive vs. Active Strategy i. Passive One of the most profound ideas affecting the investment decision process‚ and indeed all of finance‚ is the idea that the securities markets‚ particularly the equity markets‚ are efficient. In an efficient market‚ the prices of securities do not depart for any length of time from the justified economic values that investors calculate for them. Economic values for securities are determined by investor expectations about earnings
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Chapter 14 Multinational Capital Budgeting Lecture Outline Subsidiary versus Parent Perspective Tax Differentials Restricted Remittances Excessive Remittances Exchange Rate Movements Input for Multinational Capital Budgeting Multinational Capital Budgeting Example Background Analysis Factors to Consider in Multinational Capital Budgeting Exchange Rate Fluctuations Inflation Financing Arrangement Blocked Funds Uncertain Salvage Value Impact of Project
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Responsibilities of Multinational Companies in a Globalized World Multinational companies are the biggest players in economy today‚ replacing the role states used to play in the past. Through globalization‚ the multinational companies become increasingly important in our world economy. Nowadays‚ more than half of the top economies in the world are led by multinational private companies and the international investment comes increasingly from private sources. Foreign Direct Investment (FDI) and globalization
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Foreign Direct Investment Theories: An Overview of the Main FDI Theories Vintila Denisia Academy of Economic Studies‚ Bucharest‚ denamv20@yahoo.com Abstract Foreign Direct Investment (FDI) acquired an important role in the international economy after the Second World War. Theoretical studies on FDI have led to a better understanding of the economic mechanism and the behavior of economic agents‚ both at micro and macro level allowing the opening of new areas of study in economic theory. To understand
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Theories of Foreign Direct Investment Foreign Direct Investment‚ or FDI‚ is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor. Foreign direct investment has many forms. Broadly‚ foreign direct investment includes "mergers and acquisitions‚ building new facilities‚ reinvesting profits earned from overseas operations and intracompany loans”. Foreign direct investment incentives may take the following
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Agency Theory‚ Multinational Corporation‚ and Religiosity Over time‚ the raising issue on agency theory where conflict of interest between shareholders who act as the principal and managers who act as the agent has become a big research topic in corporate governance. Fama and Jensen (1983) argue within large and small organizations there is control instrument that deals with the agency problem caused by the separation of ownership and control. The same issue intensifies within multinational corporations
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BUSA Final Chapter 6 Objectives: 1. Theories of international trade and investment 2. why do nations trade? 3. How can nations enhance competitive advantage? 4. Why and how do firms internationalize? 5. How can internationalizing firms gain and sustain competitive advantage? Theories of International Trade and Investment: Mercantillism: belief popular in 16th century - National prosperity results from maximizing exports and minimizing imports Nonmercantillism: today some argue - nation should
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overConclusionbibliography | | Introduction A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. It can also be referred to as an international corporation. They play an important role in globalization. The first multinational corporation was the Dutch East India Company‚ founded
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RESEARCH PAPER TOPIC : MULTI-NATIONAL CORPORATIONS MULTINATIONAL CORPORATIONS Multi-National Corporations can also be termed as Multi-National Companies or Multi-National Enterprises. A corporation or group of companies that has its operations of producing and selling its products in home and host countries is said to be an MNC. MNC has its production and sales in different countries based on their parent organization rules. The operations are registered in different regions
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