1. Introduction Over the last decade and a half, there has been a growing literature on ‘financialization’ and its impact on corporate behavior and the economy as a whole. It is most broadly understood as a process in which the financial markets and financial institutions grow in size and influence in an economy at the expense of the real sector. Epstein (2001, pg. 3) defines it as “the increasing importance of financial markets, financial motives, financial institutions, and financial elites in the operation of the economy and its growing institutions, both at the national and international level”.
India is fast emerging as a global leader, what with its vast, natural resources, and huge base of skilled manpower. Combined with cutting edge technology, Indian trade market is making its presence felt all across the world. Indian products and services are seen as of international standards and globally competitive. Trade in India has made good progress on liberalizing trade regimes and cutting tariffs since the recent times, when most of the countries started with reforms. Integrating with the global economy, India has recorded strong export growth to the United States and the European Union markets.
According to the trade-off theory, firms can optimize their own capital structure because they encounter a trade-off between the advantages and disadvantages of debt on firm's market value; rising leverage by increasing debt means that the firm can benefit from debt tax shields, which will increase its value (Modigliani and Miller’s (1963) Proposition I under corporate taxes). However, high leverage leads to higher (expected) direct and indirect costs of financial distress, thus, decreasing the firm’s market value. Direct costs include the legal and administrative costs of liquidation or reorganization. Indirect costs refer to the impaired ability to conduct business and to agency costs of debt that are specifically related to periods of high
One of the key goals of business strategy is growth. There are many ways in which a company can grow, but one of the most effective and rapid methods is through mergers and acquisitions (M&A). M&A is a general term used to refer to the consolidation of companies. The term M&A typically includes any business combination in which a company obtains capital in the form of equity and/or debt, or in which the company, or a portion of the company, is acquired. Specifically, an acquisition is the buying of one business entity by another, and a merger is when companies combine to form a new company.
But some countries particularly developing countries will have a larger GDP than GNP as they will have many multinational enterprises investing into their economy. Lastly, gross national income (GNI), accounts for all GNP calculations as well as net cross country income, which is any flows of capital between countries for example dividends or interest payments. I will be measuring economic growth through real GDP per capita. This method is used most commonly in the existing literature I have studied and it provides a fairer comparison between countries. (Labes, 2015) supports by stating that “GDP and GDP per capita are most commonly used as a major determinant for FDI flows between two countries.” This is due to the fact that FDI is strongly influenced by the size of the markets of the partner countries because FDI flows tend to gravitate towards larger economies (Yuko Kinoshita,
The banking industry has been undergoing major consolidation in recent years, with a number of global players emerging through successive mergers and acquisitions. Competition is generally considered a positive force in most industries; it is supposed to have a positive impact on an industry’s efficiency, quality of provision, innovation and international competitiveness. However, this issue has always been controversial in banking, as the perceived benefits derived from increased competition have to be weighed against the risks of potential instability (Casu and Girardone, 2009). Internationalization refers to the integration of economies throughout the world by means of trade, financial and technological flows, exchange of technology and
Economic analysis is important in order to understand condition of an economy. The level of economic activity has an impact on investment in many ways. If the economy grows rapidly, the industry can also be expected to show rapid growth and vice versa. The degree of economic growth is directly proportional to the stock price i.e. when the economic activity is high, the stock prices are also high indicating the prosperous outlook for sales and profit of the firm.
Course Justification/Rationale: International trade has flourished over the years due to the many benefits it has offered to different countries across the globe. The benefits of international trade and finance have been the major drivers of growth for the last half of the 20th century. Nations with strong international trade have become prosperous and have the power to control the world economy. The global trade can become one of the major contributors to the reduction of poverty. This course is being offered at a very interesting time.
This foreign aid is divided into two components: portfolio investment “is an investment made by an investor who is not involved in the management of a company” (Bloch, 1977: 19) and foreign direct investment “which allows an investor to exercise a certain degree of managerial control over a company” (Bloch, 1977: 19). A lot of research has been on the deliberation of foreign direct investment, but when does literature focus on PI? The focus on foreign aid has proliferated due to ever increasing hype of economic development in the international economy. It’s no secret that when one hears the term globalization, they think of interconnectedness, networks of communications, technological advancement and so on. This part of the review is concerned with violation of the Right to Privacy in Africa.
LITERATURE REVIEW 2.1 INTRODUCTION This chapter provides a survey of previous works by different economic and financial researchers regarding financial sector and its impact on economic growth and development of a country. Many theoretical and empirical researches show that in the development of a country financial sector plays an important role. Robinson (1952), writes “where enterprises leads, finance follows”. This hypothesis follows economic growth and development. In her views economic growth creates demand for financial sector and financial sector respond to these demands automatically.