MSc Business Analysis and Strategic Management

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 establishes the close links between corporate governance and corporate finance. It describes key features of the international monetary system and explores the particularities of various foreign exchange regimes and their impact on multinational companies (MNEs). The balance of payments, interest rates and inflation rates are discussed and linked to key foreign exchange rate theories. The unit explains foreign exchange risk for MNEs and the hedging strategies available to MNEs to reduce various types of foreign exchange exposures. It also covers key aspects of international financial management such as the use of international debt and equity financing, and tax management. A foundation in financial management theories is combined with practical applications and analysis of current issues, as well as computer lab sessions giving students training in using key databases for financial management, and practice in financial analysis and calculations.

BMAN71552 Programme Req: BMAN71552 is only available as an elective to students on MSc IB&M, and MSc BASM

• To understand the fundamental theoretical concepts of international business finance and demonstrate their practical applications in real-world settings.
• To explain the evolution and the merits of various foreign exchange rate regimes and the importance of balance of payments accounts.
• To introduce key theories for the determination of foreign exchange rates, based on the balance of payments, variables such as interest rates and inflation, and the demand for financial assets.
• To 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.
• To identify different systems of corporate governance and their impact on the financial management function.
• To explain the international parity conditions for foreign exchange rates, interest rates and inflation.
•   To 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.
• Evaluate the effect of market liquidity and segmentation on the cost of capital.
• Describe the various financial instruments that can be used to source equity in the global equity markets.
• Understand the unique characteristics of multinational tax management.

 

Individual Coursework - 100%
 

Written and/or verbal comments on assessed or non-assessed coursework.

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.

 

Informal Contact Method

• Office Hours