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The eleventh edition of Multinational Financial Management is a comprehensive survey of the essential areas of the international financial market environment, including foreign exchange and derivative markets, risk management, and international capital markets and portfolio investment. Designed for upper-level undergraduate and masters-level courses in international finance and management, this textbook offers readers a conceptual framework for analyzing key financial decisions of multinational firms. The authors both explain and simplify multinational financial management by illustrating how its basic principles share the same foundation as domestic corporate finance.Assuming no prior knowledge of international economics or finance, this substantially revised new edition builds upon the fundamental principles of domestic financial management to examine the unique dimensions of international finance. Readers are presented with a solid theoretical knowledgebase for examining decision problems, as well as practical analytical techniques that clarify the often-ambiguous guidelines used by international financial executives. All the traditional areas of corporate finance are explored from the perspective of a multinational corporation, focusing on elements rarely encountered in domestic finance such as multiple currencies, segmented capital markets, and political risks of nationalization or expropriation.
Table des matières
List of Figures xix
List of Tables xxiii
Preface xxvii
World Currencies and Symbols xxxi
Acronyms and Symbols xxxv
Part I The International Financial Management Environment
1 Introduction: Multinational Corporations and Financial Management 3
1.1 The Rise of the Multinational Corporation 4
1.1.1 Evolution of the Multinational Corporation 7
1.1.2 The Process of Overseas Expansion by Multinationals 14
1.1.3 A Behavioral Definition of the Multinational Corporation 17
1.1.4 The Global Manager 18
1.2 The Internationalization of Business and Finance 18
1.2.1 Political and Labor Union Concerns About Global Competition 19
1.2.2 Consequences of Global Competition 22
1.3 Multinational Financial Management: Theory and Practice 24
1.3.1 Functions of Financial Management 25
1.3.2 Theme of This Book 25
1.3.3 Relationship to Domestic Financial Management 26
1.3.4 The Global Financial Marketplace 28
1.3.5 The Role of the Financial Executive in an Efficient Market 28
1.4 Outline of the Book 29
1.4.1 The International Financial Management Environment 29
1.4.2 The Foreign Exchange and Derivatives Markets 29
1.4.3 Foreign Exchange Risk Management 29
1.4.4 The International Capital Markets and Portfolio Management 29
1.4.5 International Capital Budgeting 30
Questions 30
Appendix: The Origins and Consequences of International Trade 31
Questions 35
2 The Determination of Exchange Rates 37
2.1 Setting The Equilibrium Spot Exchange Rate 38
2.1.1 Factors That Affect the Equilibrium Exchange Rate 39
2.1.2 Calculating Exchange Rate Changes 41
2.2 Expectations and The Asset Market Model of Exchange Rates 43
2.2.1 The Nature of Money and Currency Values 44
2.2.2 Central Bank Reputations and Currency Values 44
2.3 The Fundamentals of Central Bank Intervention 49
2.3.1 How Real Exchange Rates Affect Relative Competitiveness 50
2.3.2 Foreign Exchange Market Intervention 50
2.3.3 The Effects of Foreign Exchange Market Intervention 53
2.4 The Equilibrium Approach To Exchange Rates 55
2.5 Disequilibrium Theory and Exchange Rate Overshooting 55
2.5.1 The Equilibrium Theory of Exchange Rates and Its Implications 56
2.6 Conclusions 58
Questions 60
Problems 61
References 62
3 The International Monetary System 63
3.1 Alternative Exchange Rate Systems 64
3.1.1 The Trilemma and Exchange Rate Regime Choice 64
3.1.2 Free Float 66
3.1.3 Managed Float 67
3.1.4 Target-Zone Arrangement 69
3.1.5 Fixed Rate System 69
3.2 A Brief History of the International Monetary System 70
3.2.1 The Classical Gold Standard 71
3.2.2 How the Classical Gold Standard Worked in Practice: 1821-1914 73
3.2.3 The Gold Exchange Standard and Its Aftermath: 1925-1944 73
3.2.4 The Bretton Woods System: 1946-1971 74
3.2.5 The Post-Bretton Woods System: 1971 to the Present 76
3.2.6 Assessment of the Floating Rate System 77
3.3 The European Monetary System and Monetary Union 78
3.3.1 The Exchange Rate Mechanism 79
3.3.2 Lessons from the European Monetary System 79
3.3.3 The Currency Crisis of September 1992 79
3.3.4 The Exchange Rate Mechanism Is Abandoned in August 1993 80
3.3.5 European Monetary Union 81
3.3.6 Optimum Currency Area 88
