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Rupesh Roshan Singh, Lovely Professional University          Unit 1: Financial Management in Global Context





                Unit 1: Financial Management in Global Context                                  Notes


            CONTENTS
            Objectives
            Introduction

            1.1  Scope of International Finance
                 1.1.1  Global Links
            1.2  Objective of the MNCs

                 1.2.1  Agency Problem
                 1.2.2  Objectives of the Firm and Risk Management
            1.3  International Financial Management and Domestic Financial Management
                 1.3.1  International Business Activities
            1.4  International Business Methods

            1.5  Field of International Business
                 1.5.1  Motivation for International Business
            1.6  Summary

            1.7  Keywords
            1.8  Review Questions
            1.9  Further Readings


          Objectives

          After studying this unit, you will be able to:

               Explain the scope of international finance
               Discuss the objectives of multinational companies
               Elaborate the differences in international financial management and domestic financial
               management

               Describe the international business methods
               Discuss the fields of international business
          Introduction


          Globalization has made a tremendous impact throughout the world in past few years. The
          world has seen a tremendous increase in the global transactions and foreign trade in recent
          years. Multinational companies and Transnational companies hold strong positions in different
          channels of globalization. They account for all foreign direct investment, are very active in
          trade, with one third of world trade taking place within and not between companies.
          The main reason behind this is that now more and more countries are getting engaged in
          trading with each other in order to increase their profit or sales or protecting them from being
          eroded by competition. The main objectives which are influencing the companies to engage in



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