International Business and Finance

Module Annotation

The course will focus on an analysis of

• the main mechanisms to conduct International Business (Trade, Foreign Direct Investment, Hybrids mechanisms), their advantages and disadvantages. Theory will be accompanied by the analysis of practical cases.
• Some specific aspects of international business (Corruption and its regulation, Ethics in International Business, role of Intermediators)
• Methods of financing International Business
• Sources of financial capital (Equity, Debt)
• Methods to assess the Cost of Capital and Benefits of Investment (WAAC, CAPM)

Module Targets 

The aim of the course is to introduce and international finance and international financial system from the business and financial management perspective. The student will gradually get acquainted with the most important indicators of external economic position such as balance of payments, exchange rate, foreign investments and their mutual links. The course also covers topics as international financial markets and financial derivatives.

Syllabus

1-2) What is international business (IB). IB basic indicators - balance of trade / payment. International business importance and influences, differences from domestic trading. Territorial / commodity structure of IB. Global business environment. Comparative advantage, free trade / economy. The main regional trading blocks.

3-4) Internationalization and Globalization. Drivers of Internationalization. Categories of goods traded internationally (primary, low/high value, capital intensive). FACTORS influencing the IB environment (Political, Economic, Technological). Motives for foreign expansion (microeconomic view). Entry modes and business activities in IB (export, import, contractual, investment activities, FDI). Team work on the semestral project.

5-6) Culture and its role in international business. Cultural elements and multi-culture communication (verbal, non-verbal, role of eyes, silence etc.). Hofstede’s five dimensions of culture differences. Negotiation and successful presentation of business results in the international environment. Team work on the semestral project.

7-8) World business territories, Euro / Dollar zones. Emerging markets, newly industrialized countries. International market research (PEST/STEEP), and linkage to Competition analysis (Porter) and SWOT. Data collection and their selection in the international environment. Team work on the semestral project and prezentations.

9-10) International trade barriers and their assessing. Forms of economic integration, international unions, free trade areas and multilateral agreements The main regional trading blocks (TRIAD). WTO, GATT. Impact of economic integration on micro environment (companies). IB policy instruments (autonomous, contractual) Team work on the semestral project and prezentations.

11-12) Prerequisites and personal preconditions for working in international business. European Union principles of IB. Opportunities and threats of CZ membership in the EU. SWOT of Czech companies in the international business environment. Topical international business challenges and trends. International Business knowledge summary and evaluation, presentation of team business work results.

Recommended  Literature

STAVÁREK, D. International Finance: Theory and Practice in Transition Countries. Karviná: SU OPF, 2005. ISBN 80-7248-290-4.

SHAPIRO, A.C. Multinational Financial Management. 9th ed. Hoboken: John Wiley and Sons, 2010. ISBN 978-0-470-45035-2.

DeGRAUWE, P. Economics of Monetary Union. 8th Ed. Oxford: Oxford University Press, 2009. ISBN 0-199-56323-3.

KRUGMAN, P.R., OBSTFELD, M. International Economics: Theory and Policy. 8th ed. New York: Addison Wesley, 2009. ISBN 1-408-820807-5.

SERCU, P. International Finance. Theory and Practice. Princeton: Princeton University Press, 2009. ISBN 978-0-691-13667-7.

BAIMBRIDGE, M., WHYMAN, P. Economic and Monetary Union in Europe. Cheltenham: Edward Edgar, 2003. ISBN 1-84542-233-3.