Globalization and International
Capital Flows
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Globalization - International Finance - Lecture Slides, Slides of International Finance and Trade
Globalization, Opportunities and Challenges, Economic Inequality, Financial Liberalization, Contagion Effect, External Shocks, International Economy, Globalization of Finance, Mulinational Corporations, Production Costs. This lecture was delivered by Professor in International Finance course.
Typology: Slides
2011/2012
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Globalization and International
Capital Flows
Photo: September 11, 2001, Lower Manhattan New York City
Why WTCs? What is the target? Who are the attackers?
2. Globalization of International Economy: Globalization of Production versus Globalization of Finance
Trade and Production
- GATT, WTO have reduced barriers to international trade.
- Mulinational Corporations reduce production costs through foreign direct investment: intra-firm trade across countries but between affiliates of the same firm.
Finance
Consists of
- Financial transactions to back up international trade -> growing in line with International Trade; and
- International Finance independent of international trade -> growing much faster than International Trade
3. 3 Formats of International
Capital Flows
3 Aspects Financing (Physical Investment I); Financial Investing; Hedging or Risk Managing
Data 1. Early Data of International Finance: Finance on its Own
Comments:
A large part of FOREX trading is now independent of international trade
Data 2. Who gets International Capital Flows?
Updated Statistics of International Capital Flows from the Word Bank
http://www.worldbank.org/prospects/gdf2000/slides/gdf002-6novoice/sld001.htm
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Data 4. Changing Formats of Global Capital Flows
Data 4 b. Changing Compositions of International Private Capital Flows to Developing Countries
0
20
40
60
80
100
120
1990 1996
Foreign Direct Investment Porfolio Investment Bank Loans
5. Prime Contributing Factors for FDI
Investor Side: Relocation of Production Facilities by MNEs
Receiver Side: FDI may be a chance for technology transfer
6. Factors contributing
to Portfolio Investment
Case Study 2: U.S. Financial
Investment in China
China was open in the late 1970s to U.S. investment First Love did not last long; U.S. FDI did not go well Jim Mann describes initial excitement, perils, and final failures and withdrawal by U.S. investors in China( Beijing Jeep: a case study of western business in China) What would be remaining options of disenchanted U.S. investors for China?
Korean FDI in China
U.S.’s Portfolio Investment in Kora