Multinational Financial Management

International Financing and National Capital Markets

Money, like wine, must always be scarce with those who have neither wherewithal to buy it nor credit to borrow it.

ADAM SMITH (1776)

LEARNING OBJECTIVES

• To describe trends and differences in corporate financing patterns around the world
• To define securitization and explain the forces that underlie it and how it has affected the financing policies of MNCs
• To explain why bank lending is on the decline worldwide and how banks have responded to their loss of market share
• To explain what is meant by the globalization of financial markets and identify the factors that have affected the process of globalization
• To describe the external medium- and long-term financing options available to the multinational corporation
• To identify the functions and consequences of financial markets
• To describe the links between national and international capital markets
• To explain why firms may choose to raise capital overseas
• To describe the types and roles of development banks

The growing internationalization of capital markets and the increased sophistication of companies mean that the search for capital no longer stops at the water's edge. This reality is particularly true for multinational corporations. A distinctive feature of the financial strategy of MNCs is the wide range of external sources of funds that they use on an ongoing basis. General ...