International Business Finance

BMAN71552 International Business Finance 15 Semester 2 Postgraduate Taught Level 7 Asmund Rygh Unit coordinator 1 FHEQ level (Framework for Higher Education Qualifications) ' Masters/Integrated Masters P4 ' European Credit Transfer & Accumulation System Rating : 7.5 This course unit takes a financial perspective on international business. It explores the opportunities and risks associated with financial internationalisation and explains the critical role played by global capital markets in facilitating the cross-border exchange of products, services and capital. The unit explores the close links between corporate governance and corporate finance and the international diversity of corporate governance and financial systems. It describes key features of the international monetary system and the particularities of various foreign exchange regimes and their impact on multinational enterprises’ (MNEs) operations. The balance of payments, interest rates and inflation rates are discussed and linked to key foreign exchange rate theories. The unit explains different forms of foreign exchange exposures for MNEs and hedging strategies to mitigate such exposures. It also covers key aspects of international financial management such as the use of international debt and equity financing, and tax management. Attention is paid to social responsibility issues related to international financial management. A foundation in financial management theories is combined with practical applications and analysis of current financial topics , with dedicated computer lab sessions giving students practice in using key databases for financial management, and in performing simple financial calculations.  This course unit takes a financial perspective on international business. It explores the opportunities and risks associated with financial internationalisation and explains the critical role played by global capital markets in facilitating the cross-border exchange of products, services and capital. The unit explores the close links between corporate governance and corporate finance and the international diversity of corporate governance and financial systems. It describes key features of the international monetary system and the particularities of various foreign exchange regimes and their impact on multinational enterprises’ (MNEs) operations. The balance of payments, interest rates and inflation rates are discussed and linked to key foreign exchange rate theories. The unit explains different forms of foreign exchange exposures for MNEs and hedging strategies to mitigate such exposures. It also covers key aspects of international financial management such as the use of international debt and equity financing, and tax management. Attention is paid to social responsibility issues related to international financial management. A foundation in financial management theories is combined with practical applications and analysis of current financial topics , with dedicated computer lab sessions giving students practice in using key databases for financial management, and in performing simple financial calculations.  • Present the fundamental theoretical concepts of international business finance and demonstrate their practical applications in real-world settings. • Explain the evolution and the merits of various foreign exchange rate regimes and the importance of balance of payments accounts. • Introduce key theories for the determination of foreign exchange rates, based on the balance of payments, international parity conditions for interest rates and inflation, and the demand for financial assets. • Describe and analyse the financial transactions conducted through the foreign exchange market, including the various hedging strategies that can be used to mitigate foreign exchange risk. • Identify different national and international systems of corporate governance and their impact on the financial management function. • Outline the institutional, political and social responsibility context of      international financial management. • Understand the financial dimension of international economic activity and how it impacts the functioning of multinationals in different markets. • Demonstrate knowledge of key concepts, terminologies and procedures used in multinational business finance. • Distinguish between the three major foreign exchange exposures experienced by firms and understand strategies for mitigating such exposures. • Evaluate the effect of market liquidity and segmentation on the cost of capital. • Describe the various financial instruments that can be used to source capital in the global capital markets. • Understand the unique characteristics of multinational tax management.   Appreciate the importance of finance for international business and the unique aspects of international finance. Understand the impact of different foreign exchange rate regimes on international business. Understand the effect of market liquidity and segmentation on the cost of capital.   Apply exchange rate determination theories to assess past trends and possible future developments in the exchange rate. Evaluate strategies for managing foreign exchange rate exposures related to international business activities. Evaluate the various financial instruments that can be used to source capital in the global capital markets. Use key databases and webpages to collect and process information and data relevant to financial management.  Be able to write a concise report on complex topics for a business or other audience.  The unit builds on and combines different sets of literature to provide a comprehensive view of international financial management. Inter alia, finance literature is used to provide a foundation in key concepts such as cost of capital. Macroeconomics literature is used to introduce key topics such as the balance of payments, foreign exchange rate regimes and foreign exchange rate determination theories. International business literature on foreign market entry modes (e.g. exports and foreign direct investment) allows a consideration of financing in the international context. Finally, literature on corporate governance offers a foundation on the institutional setting for finance.    The core teaching methods consist of 10 weeks of 2-hour lectures and 1-hour computer laboratories. Specific e-learning methods may include the use of Padlet, Mentimeter and other tools for class discussions. 0 Other 100% Individual Coursework - 100%   Written and/or verbal comments on assessed or non-assessed coursework. BMAN71552 Programme Req: BMAN71552 is only available as an elective to students on MSc IB&M, and MSc BASMBMAN71552 is available as an elective to students on MSc IB&M and MSc BASM unit director. MSc Int Business & Management MSc Int Bus & Management-Mgmt PGDT Taught Component Optional MSc Int Business & Management MSc Int Bus & Management PGDT Taught Component Optional N Textbooks: • Eiteman, D. K., Stonehill, A.I., and Moffett, M.H. 2016. Multinational Business Finance (14th ed.). Boston: Pearson. •  Goergen, M. 2018. Corporate governance: a global perspective. Boston: Cengage Learning.Examples of journal articles: • Bowe, M., Filatotchev, I., & Marshall, A. 2010. Integrating contemporary finance and international business research. International Business Review, 19(5): 435-45. • Contractor, F. J. 2016, Tax avoidance by multinational companies: Methods, policies, and ethics, Rutgers Business Review, 1(1): 27-43. • Desai, M. A., Foley, C. F., & Hines Jr, J. R. 2004. A multinational perspective on capital structure choice and internal capital markets. Journal of Finance, 59(6): 2451-87. • Desai, M. A. 2008. The finance function in a global corporation. Harvard Business Review, July-August Issue, https://hbr.org/2008/07/the-finance-function-in-a-global-corporation. • Foley, C. F. & Manova, K. 2015. International trade, multinational activity, and corporate finance. Annual Review of Economics, 7(1): 119-46. • Muller, A. & Verschoor, W. F. 2006. Foreign exchange risk exposure: Survey and suggestions. Journal of Multinational Financial Management, 16(4): 385-410. • Oxelheim, L., Randøy, T., & Stonehill, A. 2001. On the treatment of finance-specific factors within the OLI paradigm. International Business Review, 10(4): 381-98. • Puck, J. & Filatotchev, I. 2020. Finance and the multinational company: Building bridges between finance and global strategy research. Global Strategy Journal, 10(4): 655-675. • Remmers, L. 2004. International financial management: 35 years later—what has changed? International Business Review, 13(2): 155-80. • Talaulicar, T. 2010. The concept of the balanced company and its implications for corporate governance. Society and Business Review, 5(3): 232-44.  Lectures 20 Practical classes & workshops 10 0 120 Informal Contact Method<ul> <li> Office Hours</li></ul>