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8/13/2019 Presentation1 If
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International Finance (405-B)
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Chapter 1
Overview of International Business
International business
Any type of Business activity that cross national borders.
Need of International Business
Categories in International business
- Foreign Trade
- Trade in Services
- Portfolio Investments
- Direct Investments
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Globalization
“It refers to a process of integration of the world into
one huge market” Impact of Globalization
-Configuring anywhere in the world
-Inter-linked and Inter-dependent Economies
-Lowering of trade and tariff barriers-Effect on related industries
-Mobility of skilled resources
-Market side Efficiency
-Formation of regional blocks-Intra structural resources and inputs and internationalprices
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• Features of Globalization
•
Drivers of Globalization
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• WTO(World Trade organization)
Is an international organization design by the
founders to supervise and liberalize international trade.• Functions of WTO
• Organisation of WTO
- Hierarchical conference
– Ministerial conference
– General council
– Councils
– Committees and Management Bodies
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• World Bank(IBRD)
– Is an inter governmental institutions ,corporate in form,the capital stock of which is entirely owned by its member
government
• Objectives of World Bank
•Role of World Bank – Advances loans
– Provide technical assistance
– Imparts Training
– Settlement of International disputes
– Provide Financial; Assistance
– Conduct economic research
– Establishing Subsidiary institutions
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• International monetary fund – IMF was created with a goal to stabilize exchange
rates and assist the re-construction of the worlds
international payment system
• Functions of IMF – Short term credit Institutions
– Acts as a mediator – Dispensation of Justice
– Technical Assistance
– Publication
• Organization structure
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• SDR(Special Drawing rights)
–
Is the monetary unit of the reserve asset of theIMF
• Role of SDR
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International Finance
Def-IF is the branch of economics that studies
the dynamics of exchange rates, foreign
investments, and how these affectinternational trade
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Nature and Scope of International Finance
–
Foreign exchange management – Exchange rate determination
– Exchange rate risk and its managements
– MNC,s investment decisions
– International Working Capital Decisions
– Financing decisions of the MNC,s
– Inter accounting and taxation
– Inter indebtedness
Significance of International Finance
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Use of IT in International Business
– ITES(IT enabled services)
– KPO(Knowledge Process Outsourcing)
– E-Business enterprises