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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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