Introduction: Multinational Enterprise and Multinational Financial Management

What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage.



  • To understand the nature and benefits of globalization
  • To explain why multinational corporations are the key players in international economic competition today
  • To understand the motivations for foreign direct investment and the evolution of the multinational corporation (MNC)
  • To identify the stages of corporate expansion overseas by which companies gradually become MNCs
  • To explain why managers of MNCs need to exploit rapidly changing global economic conditions and why political policymakers must also be concerned with the same changing conditions
  • To identify the advantages of being multinational, including the benefits of international diversification
  • To describe the general importance of financial economics to multinational financial management and the particular importance of the concepts of arbitrage, market efficiency, capital asset pricing, and total risk
  • To characterize the global financial marketplace and explain why MNC managers must be alert ...

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