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The main concern of Financial Management is how optimally make a variety of

financial decisions, such as procuring funds from various sources, financing, dividend
policy, and current asset management, with the view to achieving organization goals
and objectives. In many advanced countries with well – progressed capital markets,
maximizing shareholder wealth is generally treated the most important corporate
objectives.

Why do we need to study International Financial Management?

Before answer this question, let we consider these example, American consumers
routinely purchase crude oil from Saudi Arabia and Nigeria, TV Sets and Camcorders
from Japan, vehicles from Germany, garments from China, footwear from Indonesia,
Pasta form Italy and wine from France. Foreigners, in turn, purchase American –
made aircraft, software, movies, jeans, wheat, and other products.
Persistent liberalization of international trade is definite to further internationalize
consumptions patterns around the world. Moreover fast growing technological
advancements make these consumptions patterns more easy and comfort. That leads
us to live in a highly globalized and integrated world economy.
On the other hand production of goods and services has become highly globalized.
This has happened as a result of Multinational Corporations (MNCs) relentless efforts
to source inputs and inputs and locate production anywhere in the world where costs
are lower and profits are higher. For illustration personal computers sold in the world
might have been assembled in Malaysia with Taiwanese made monitors, Korean
made keyboards, US Made chips, and preinstalled software packages that were
jointly developed by US and Indian engineers. It has often become difficult to clearly
associate a product with a single country of origin.
Nowadays, Financial markets have also become highly integrated. This improvement
allows investors to diversify their investment portfolios internationally. In the other
Competently Produce Products in Overseas Markets than that Domestically
Domestic Marketing stands for the marketing activities such as production, distribution
and sales of goods and services with in the specific country border while global
market stands for the production, distribution and sales of goods and services out
side the country boarder. Domestic Marketing is less risky and much easier than
Global Marketing. At the same time high risk and complex assignments yield more
profit. Therefore International Finance Management plays a vital role to do business
effectively in abroad and yield more return.

Obtain the Necessary Raw Materials Needed for Production.

Widen Markets and Diversify
Earn Higher Profits
Overseas Investment
Comparative Advantages
The Major reward of international Financing is that it has brought about more wealth by allowing nations to specialize
in producing commodities at which they are relatively efficient. [1] The relative efficiency of a nation in manufacturing
a specific product can be explained in terms of the amount of others, in other words commodities that could be
produced by the same inputs. It can be termed in other words that the ability of any given economic actor to produce
commodities at a lower opportunitiy cost than other economic actors.[2] In Economic we term this concept as
Comparative Advantaes. All contries can simulteously gain from make use of their Comparative Advantages, as
well as from the larger scale production and broader choice of commodities that is made availabel by International
Financing.
Competative Advatages
As Michael E Porter, says in his book titled The Competitive Advantage of Nations”, Published by Harward University
Press, Cambridge, MA, in 1989, that in the last few years it has preferably noted that noted that there is more to
successful international trade than comparative advanteges based on productive efficiencies. He further continues
that comparative advantages cannot describe distinct pattern of success, such as cities like Singapore and Hong
Kong’s rapidly growing with limited resources compared with Argentina’s slow economic progress dispite well rich
natural Advantages.
Moreover Comparative Advantages do not answer why some areas within contries such as nothern India grow faster
than other regions, while part of enterprises expand while others are not. It is clear that dynamic factors, rather than
static production perfection and ‘factors endowments’ play an important role in international business success by
providing nations Competative Advantages. These alow the respective domestic manufacturer to produce unique
featured product and delight their domestic consumer; forces to mantian and expand the same taste and quality to
international constomer who are more productive and profitable stake holders to them. The continuos competition
force makes specific company to produce featured product and that it self create a brand to that nation.

For Illustration
France is famous for wine and chees, German becomes leader in beer and automobile engines, and so on

Clusters of Supportive Activies

The success of International trade is the presence of suppplier and organizations in supportive organizations in the
surounding of foriegn companies. For Example, India Supplies large human resources to Foriegn companies. This is
knwon as Clusters of supportive activities.

1. International Finance By Maurice D. Levi (041530900X)

2. https://www.investopedia.com/terms/c/comparativeadvantage.asp
●
● What is a 'Multinational Corporation - MNC'
A multinational corporation (MNC) has facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different
countries and usually have a centralized head office where they coordinate global management. Very large multinationals have budgets that exceed those of many small
countries. Multinational corporations are sometimes referred to as transnational, international or stateless corporations.

●
BREAKING DOWN 'Multinational Corporation - MNC'
Nearly all major multinationals are either American, Japanese or Western European, such as Nike, Coca-Cola, Wal-Mart, AOL, Toshiba, Honda and BMW. Advocates of
multinationals say they create high-paying jobs and technologically advanced goods in countries that otherwise would not have access to such opportunities or goods. On the
other hand, critics say multinationals have undue political influence over governments, exploit developing nations and create job losses in their own home countries.
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Generally speaking, multinational corporations will derive at least a quarter of their revenues outside their home country.
The Rise of the Multinational Corporation
The history of the multinational is linked with the history of colonialism. Many of the first multinationals were commissioned at the behest of European monarchs in order to
conduct expeditions. Many of the colonies that were not held by Spain or Portugal were under the administration of some of the world's earliest multinationals. One of the first
arose in 1660: The East India Company, founded by the British. It was headquartered in London, and took part in international trade and exploration, with trading posts in
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India. Other examples include the Swedish Africa Company, founded in 1649, and the Hudson's Bay Company, which was incorporated in Canada in the 17th century.
Categories of Multinationals
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There are four categories of multinationals that exist. They include:
A decentralized corporation with a strong presence in its home country
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A global, centralized corporation that acquires cost advantage where cheap resources are available
A global company that builds on the parent corporation’s R&D
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A transnational enterprise that uses all three categories
Differences Between Types of Multinationals
There are subtle differences between the different kinds of multinational corporations. For instance, a transnational — which is one type of multinational — may have its home
in at least two nations and spreads out its operations in many countries for a high level of local response. Nestle is an example of a transnational corporation, which executes
● business and operational decisions in and outside of its headquarters.
Meanwhile, a multinational enterprise controls and manages plants in at least two countries. This type of multinational will take part in foreign investment, as the company
invests directly in host country plants in order to stake an ownership claim, thereby avoiding transaction costs. Apple is a great example of a multinational enterprise, as it
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tries to maximize cost advantages through foreign investments in international plants.
Largest Multinationals
The 10 largest multinational corporations in the world, as of 2016 revenue, are Wal-Mart ($485.87 billion), StateGrid ($315.2 billion), Sinopec Group ($267.52 billion), China
National Petroleum ($262.57 billion), Toyota ($254.69 billion), Volkswagen Group ($240.26 billion), Royal Dutch Shell ($240.03 billion), Berkshire Hathaway ($223.60 billion),
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Apple ($215.64 billion), and Exxon Mobil ($205 billion).
Wal-Mart has operations in 28 countries, including over 11,700 retail stores that employ over 2.3 million people internationally.
● Advantages and Disadvantages of Multinationals
There are a number of advantages to establishing international operations. Having a presence in a foreign country such as India allows a corporation to meet Indian demand
for its product without the transaction costs associated with long-distance shipping. Corporations tend to establish operations in markets where their capital is most efficient or
wages are lowest. By producing the same quality of goods at lower costs, multinationals reduce prices and increase the purchasing power of consumers worldwide.
Establishing operations in many different countries, a multinational is able to take advantage of tax variations by putting in its business officially in a nation where the tax rate
is low — even if its operations are conducted elsewhere. The other benefits include spurring job growth in the local economies and that it may increase the company's tax
● revenues.
A trade-off of globalization, or the price of lower prices, is that domestic jobs are susceptible to moving overseas. Data from the Bureau of Labor Statistics (BLS) shows that
between 2001 and 2010, the United States lost roughly 33% of its manufacturing jobs (5.8 million jobs). This data underscores how important it is for an economy to have a
mobile or flexible labor force, so that fluctuations in economic temperament aren't the cause of long-term unemployment. In this respect, education and the cultivation of new
skills that correspond to emerging technologies are integral to maintaining a flexible, adaptable workforce. A few of the fastest-growing industries in the United States are
peer-to-peer lending platforms, medical marijuana stores, telehealth services and motion capture software development; together, these industries are replacing many of the
● American jobs that were displaced by overseas manufacturing.
Those opposed to multinationals also say its a way for the corporations to develop a monopoly (for certain products), therefore, driving up prices for consumers. They are also
said to have a detrimental effect on the environment because their operations may lead to land development and the depletion of local (natural) resources. The introduction of
multinationals into a host country's economy may also lead to the downfall of smaller, local businesses. Activists have also claimed that multinationals breach ethical
standards, accusing them of evading ethical laws and leveraging their business agenda with capital.

Multinational Corporation (MNC) https://www.investopedia.com/terms/m/multinationalcorporation.asp#ixzz5BS3y2clO

Comparative Advantages
The Major reward of international Financing is that it has brought about more wealth
by allowing nations to specialize in producing commodities at which they are relatively
efficient. [1] The relative efficiency of a nation in manufacturing a specific product can
be explained in terms of the amount of others, in other words commodities that could
be produced by the same inputs. It can be termed in other words that the ability of any
given economic actor to produce commodities at a lower opportunitiy cost than other
economic actors.[2] In Economic we term this concept as Comparative Advantaes.
All contries can simulteously gain from make use of their Comparative Advantages,
as well as from the larger scale production and broader choice of commodities that is
made availabel by International Financing.

Competative Advatages
As Michael E Porter, says in his book titled The Competitive Advantage of Nations”,
Published by Harward University Press, Cambridge, MA, in 1989, that in the last few
years it has preferably noted that noted that there is more to successful international
trade than comparative advanteges based on productive efficiencies. He further
continues that comparative advantages cannot describe distinct pattern of success,
such as cities like Singapore and Hong Kong’s rapidly growing with limited resources
compared with Argentina’s slow economic progress dispite well rich natural
Advantages.
Moreover Comparative Advantages do not answer why some areas within contries
such as nothern India grow faster than other regions, while part of enterprises expand
while others are not. It is clear that dynamic factors, rather than static production
perfection and ‘factors endowments’ play an important role in international business
success by providing nations Competative Advantages. These alow the respective
domestic manufacturer to produce unique featured product and delight their domestic