Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall1 Chapter 1: Globalization and the Multinational Corporations 熊家财 江西财经大学会计学院
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall2 Chapter 1: Globalization and the Multinational Corporations 1.1Introduction 1.2Globalization and the Growth of International Trade and Capital Flows 1.3Multinational Corporations 1.4Other Important International Players 1.5Globalization and the Multinational Firm: Benefactor or menace?
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall3 1.1Introduction Globalization: World economy increasingly globalized Increasing connectivity and integration of countries and corporations Multinational corporations (MNCs) dominating the landscape (Mittar Steel)
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall4 1.2Globalization and the Growth of International Trade and Capital Flows Globalization: Overview The Growth of International Trade Trade Liberalization International Efforts to Promote Free Trade The Growth in Trade MNCs Are Affecting Free Trade The Globalization of Financial Markets Trends in Financial Openness The New Financial Landscape
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall5 1.2Globalization and the Growth of International Trade and Capital Flows The Growth of International Trade Trade Liberalization Comparative Advantage - actual dates of trade liberalizations (Wacziarg and Welch, 2003) European Economic Community
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall6 Exhibit 1.1 Trade and Financial Openness
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall7 Exhibit 1.2 Trade Liberalization Dates by Country
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall8 1.2Globalization and the Growth of International Trade and Capital Flows The Growth of International Trade International Efforts to Promote Free Trade GATT WTO EU NAFTA ASEAN Recent Developments outsourcing
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall9 1.2Globalization and the Growth of International Trade and Capital Flows The Growth of International Trade The Growth in Trade - (export + import) / GDP MNCs Are Affecting Free Trade 60% is occurred within MNCs MNCsSubsidiaries Early 1990s
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall10 Exhibit 1.3 – Panel A The Growth in International Trade
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall11
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall12 Exhibit 1.3 – Panel B The Growth in International Trade
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall13 Exhibit 1.3 – Panel C The Growth in International Trade
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall14 1.2Globalization and the Growth of International Trade and Capital Flows The Globalization of Financial Market Trends in Financial Openness The New Financial Landscape Derivative security Securitization
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall15 Exhibit 1.1 Trade and Financial Openness
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Multinational Corporations Multinational Corporations: Overview Definition of an MNC How MNCs Enter Foreign Markets The Goals of an MNC Corporate Governance Around the World
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall17 Exhibit 1.4 World’s Top Nonfinancial Transnational Corporations by Foreign Assets
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall18
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall19 Definition of an MNC: A firm that does business in two or more foreign countries How MNCs Enter Foreign Markets Royalties Licensing Franchising Joint ventures Foreign Direct Investment (FDI) 1.3 Multinational Corporations
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall20 The Goals of an MNC Investment Time Horizon Stakeholder Alternative Agency Theory and Corporate Governance 1.3 Multinational Corporations
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall21 Corporate Governance Around the World Corporate governance differences across countries affects a firm’s valuation May lead to cross-listing of stocks 1.3 Multinational Corporations
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall22 Exhibit 1.5 Methods of Overcoming Agency Problems Due to the Separation of Ownership and Control
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall23 MNC and FDI Foreign Direct Investment (FDI) International Mergers and Acquisitions 1.3 Multinational Corporations
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall24 Exhibit 1.6 – Panel A Foreign Direct Investment
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall25 Exhibit 1.6 – Panel B Foreign Direct Investment
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall26
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall27 Exhibit 1.7 Cross-Border Mergers and Acquisitions by Buyer and Seller, (in the millions of dollars)
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall28 1.4Other Important International Players International Players International banks Multilateral Development Banks WTO OECD International institutions IMF World Bank
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Globalization and the Multinational Firm: Benefactor or Menace? Two Sides to the Globalization Argument: Pro: Benefactors Con: Anti-globalists