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International
Finance
In
the
last
few
decades
we
have
seen
the
Internationalization
of
firms
scaling
heights
owing
to
the
revolution
in
communications,
transportation,
information
and
trading
systems.
Keeping
up
with
the
latest
internationalfinance
trends
of
Globalization
and
Internationalization,
many
firms
are
looking
out
for
new
markets
and
resources
outside
their
regular
regions
of
operation
and
a
lot
of
countries
today
have
become
more
receptive
to
foreign
competition
for
their
economies,
hence
evolving
in
sophistication
and
industrialization
providing
many
opportunities
for
import
and
export.
In
this
scenario,
International
Finance doesn’t
stop
at
national
boundaries
but
there
is
no
distinct
line
separating
Inter
and
Intra-
national
Financing.
What
is
international
finance?
International
Finance is
funds
and
currencies
that
are
globally
acceptable.
The
funds
are
International
in
the
sense
that
the
demand
for
and
supply
of
funds
come
from
any
part
of
the
world.
International
Finance
is
concerned
with
International
dimensions
of
Corporate
Financing,
access
to
International
Financial
markets,
institutions
and
instruments
and
techniques
and
their
inter
linkages.
Global
Finance
markets
comprise
of
both
short,
medium
and
long
term
finances
and
the
demand
and
supply
for
them.
These
markets
arise
from
demand
and
supply
for
foreign
currencies
by
corporate
firms,
individuals,
Governmental
and
Semi-Governmental
bodies.
As
the
agencies
belong
to
a
nation
and
it
has
its
own
currency,
the
demands
for
all
other
currencies
from
International
markets
necessitate conversion
of
those
foreign
currencies
into
domestic
currencies.
The
foreign
exchange
market
comes
into
picture
and
this
is
an
adjustment
to
the
foreign
currency
markets.
International
Finance
Markets
thus
comprise
of
Money
and
Capital
Market
for
convertible
currencies
and
off
shore
funds
and
encompass
both
the
foreign
currency
markets
and
foreign
exchange
markets.
Key
Players
of
the
International
Market:
The
main
users
of
International
Market
are
the
MNCs,
Domestic
Companies
and
Government
and
Government
Bodies,
PSUs,
Banks
and
Security
dealers,
and
firms
are
important
constituents
of
these
markets.
Investors
everywhere
in
the
world
look
for
investing
in
companies
which
would
provide
them
with
highest
returns
and
for
this
they
wouldn’t
mind
investing
the
securities
of
institutions
in
countries
other
than
their
own
country.
Similarly
even
corporations
are
in
constant
search
of
potential
markets
and
resources
in
countries
other
than
that
of
their
origin.
By
definition,
Multi-National
Corporations
are
those
corporations
which
operate
in
more
than
one
country.
They
are
engaged
in
producing
and
selling
in
many
countries
or
producing
in
some
countries
and
selling
in
the
same/other
countries.
The
modusoperandi
is
that
the
parent
company
in
one
country
would
have
subsidiaries
or
joint
ventures
in
a
number
of
other
countries.
Features
of
MNCs
MNCs
have
a
different
state
of
mind.
They
think,
globally,
plan
globally
and
act
globally.
In
any
decision
of
expansion
or
diversification
they
think
in
terms
of
where
in
the
world
they
should
set
up
their
next
plant.
They
establish
themselves
in
countries
which
provide
them
the
benefit
of:
»
Unique
abilities
to
exploit
natural
resources,
favorable
regulator
or
tax
climate
high
labor
productivity,
low
wages,
low
raw
material
costs.
»
Unique
Abilities
from
intellectual
property
like
patients,
copyrights,
brands,
managerial
expertise
or
technological
process.
»
Expertise
to
apply
their
abilities
described
above
to
exploiting
market
imperfections
in
the
International
Market.
There
are
many
factors
that
segregate
MNC
Finance
from
the
normal
domestic
Finance,
these
factors
include:
•
The
MNCs
seek
out
its
capital
needs
from
low
cost
markets
on
International
Basis.
•
Its
investment
proposals
are
decided
on
a
global
basis
and
decided
on
simple
cost
benefit
principle.
The
investment
opportunities
are
spread
over
the
whole
world
and
not
confined
to
a
single
country,
•
It
was
a
commitment,
dedication
and
perseverance
to
seek
out
opportunities
in
other
countries
for
a
joint
venture,
subsidiaries
or
branches
for
integrated
production
or
sale
for
integrating
production
to
marketing.
It
has
no
national
barriers.
It
has
competence
and
management
skills
and
financial
support
to
think
and
act
globally.
•
It
is
necessary
for
MNCs
to
integrate
worldwide
operations.
Its
expertise
lies
in
identifying
its
core
competence
and
spread
this
expertise
across
nations
without
any
natural
barriers.
•
MNCs
have
flexible
plans,
adaptability
and
quickness
in
decision.
Innovation,
Initiative
and
Competence
with
a
vision
are
necessary
inputs
to
the
International
Players.
They
have
the
best
talented
management
and
put
the
right
person
in
place
to
operate
on
an
independent
basis
and
show
results
by
which
he
is
judged.
Competition
is
taken
as
a
challenge
and
they
meet
this
with
ease
by
lowering
costs
and
raising
the
profit
margins.
The
global
operations
are
planned
in
a
manner
that
overall
total
operations
result
in
maximum
profits.
It
is
not
always
necessary
that
each
country
units
show
net
profits
or
that
each
unit
should
be
self
sufficient
and
profitable
but
the
total
net
profits
of
all
units
should
be
maximized
and
share
holders’
wealth
is
optimized.
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