Global Finance

  1. Multinational enterprise (MNE)
    Defined as one that has operating subsidiareies, branches, or affilates located in foreign countries.
  2. Transnational corportations
    ownership dispersed internationally.. so they have a global perspective rather than any single country.
  3. Define global business and its three goals to reaching it
    • The socieal science of managing people to organize maintain and grow the collective productivity toward accomplishing productive goals, typically to generate profit and value for its owner and stakeholders.
    • 1.and open marketplace
    • 2.high quality strategic managment
    • 3. acces to capital
  4. Capital in Capitalism
    The ability of an enterprise to reach out and obtain resources from outside of the firm to pursue the firms vision and creae the value and create the values for all the key stakeholders in the interprise itself, and subsequently for the community and society of which it is an integral element.
  5. Competative advantage
    justinfying international trade in a model world assumed to enjoy free trade, perfect competition, no uncertainty, costless infor, and no government interference.. -adam smith
  6. Absolute advantage
    Every country should specialize in the prodution of that good it was uniquely suited for.
  7. comparative advantage
    David ricardo- each country controlled the production of one of the two products and both coutries would then benefit by specializing completely in one product and trading for the other.
  8. 5 categories of strategic drive in become mulinational.
    • 1.Market seekers
    • 2.Raw material seekers
    • 3.Production efficiency seekers
    • 4. Knowledge seekers
    • 5. Political safety seekers
  9. Market seekers
    Produce in foreign markets to satisfy local demand or to export to markets other than their home market
  10. Raw material seekers
    Extract raw materials wherever they can be found, either for export or for further processing and sale in the country in which they are found--host coutry
  11. Production efficiencey seekers
    produce in countires where one or more of the fators of production are underpriced relative to their productivity
  12. Knowledge seekers
    operate in other countries to gain access to technology or managerial expertise
  13. Political Safety seekers
    Acquire or establish new operations in countries that are considered unlikely to expropriate or interfere with private enterprises
  14. Proactive investments
    Designed to enhange the growth and profitability of the firm itself.
  15. Defensive investments
    are designed to deny growth and profitability to the firm's competitors.
  16. The globalization process
    the structural and managerial changes and challenges experienced by a firm as it moves its operations from domestic to global.
  17. financial globalization
    the growth in the influence and self-enrichment of organizational insiders
  18. unsystematic risk
    the rist of an individual security
  19. Systematic risk
    The rist of the market in genreal
  20. agency theory
    the study of how shareholders can motivate managment to accept the presiptions of the SWM shareholders wealth maximization.
  21. investment horizen
    how long it takes the firms actions, its investments, and operations to result in earnings.
  22. Patient capitalism
    focuses on longterm shareholder wealth maximization
Card Set
Global Finance
Finance night class