Chapter 9

Financial Management of the Multinational Firm

Abstract

Since multinational firms are involved in payables and receivables denominated in different currencies, product shipments across national borders, and subsidiaries operating in different political jurisdictions, they face a different set of problems than firms with a purely domestic operation. This chapter looks at the unique attributes of financial management in the multinational firm. Various methods of exercising financial control over foreign operations are covered, emphasizing the particular issues facing multinational companies, such as whether foreign subsidiary profits should be measured and evaluated in foreign currency or domestic currency of the parent company. The challenge ...

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