While the cost is attributed to consumption and output fluctuations from the loss of an independent monetary policy. The cost of joining a currency union through business cycle is captured by assessing the role of independent monetary policy in stabilizing output and consumption fluctuation. An anchor to
It aims to understand the operating, financial and capital market performance of the firm. It begins with analysis of financial statements of a firm. Financial statement includes balance sheet, income statement and cash flow statement and these information helps to determine the financial makeup of the firm. It focus on dividends paid, operating cash flow, new equity issues, and capital financing. The growth rates (of income and cash) and risk levels (to determine the discount rate) are used in various valuation models.
Variables like relative interest rate ,term of trade ,trade balance and net capital inflow were tested using regression model ,and panel data regression model which is common effect model ,fixed effect model, and random effect model to determine the variable that effect the Exchange rate . Theory From this article that I analyse macroeconomic theories that’s discovered was Exchange rate, inflation, investment, GDP, Price level and interest rate. Exchange rate: The price of a nation’s currency in term of another currency Inflation: A condition where price of goods and services rising nonstop. Investment: Investment is an asset or item that is purchased with the hope that it will create income or appreciate in the future.
Literature review The key issue from the source that had been found is to estimate the effects monetary policy has on interest rates in the private money market using market microstructure variables. Besides that, it also examines the impact of policy announcements on these rates. The volatility of interest
We can identify three theories to approach to the transatlantic investments. These three theories are the theory of the International Market, the theory of Foreign Direct Investment (FDI) and the theory of the Life Cycle of the product. 1. Meier suggests, through the theory of the International Market , that nations derive income from the international market by importing and exporting activities. The gains derived from a comparative advantage that comes from exporting those higher value goods that the country
are the location specific advantages. I stand for internalisation. When the first two conditions are fulfilled, it must be profitable for the firm to use these advantages in collaboration of some of the factors outside the country of origin (Dunning, 1973, 1980, 1988). The electic paradigm of OLI shows that OLI parameters are different from company to company and it reflects the economic, political and social conditions of the host
CHAPTER 2 THEORY OF FDI 2.1 Concept of FDI In this globalization era, many firms worldwide try to expand their business abroad in order to gain the advantages that FDI has offer. Foreign Direct Investment (FDI) itself can be defined as a category of investment made with the objective of establishing an enterprise by a company or entity in one country into a company or entity in another country OECD (2009). FDI can be divided into two types based on the direction of the investment. The first type is Inward Direct Investment which can be explained as the investment made in the reporting country by non-resident investor. The value of inward direct investment is called FDI net inflow.
The research has defined two factors to examine whether these drivers are directly affecting the bond issuing of enterprises. The first factor is firm-specific factors such as firm growth, profitability, leverage and so on. The second element is market-specific factors, for instance, larger markets with greater liquidity will encourage firms to issue bonds in order to raise fund. Before starting to do the data collection, the researcher notice two important adjustments to make policy design to be useful in comparing Asian and Latin American debt markets. The first one is to separate the effect of firm-specific on firms’ decision to issue bonds from effect of market growth and liquidity.
COMPARATIVE ADVANTAGES THEORY As an international business student, and from my knowledge of comparative advantage theory, I can say that when a country has the margin of excellence in the production of their products or services, it can be profitable to two countries to trade, import, export even if one of them could be able to produce every item cheaper than the rival which is the other country. IMPERFECT MARKET THEORY Imperfect theory is the acknowledgement of imperfection within the market which affects the efficient operations of the international market in trade and investment, the factors of imperfection could be caused by externalities in the goods or markets. It can also take the form of government induced regulations and controls
They help to decide the financing mix and extend their services up to the stage of servicing of lenders. In order to ensure an efficient management of funds, services such as bill discounting, factoring of debtors, parking of short-term funds in the money market, e-commerce and securitization of debts are provided by the financial services firms. Besides banking and insurance, this sector provides specialized services such as credit rating, venture capital financing, lease financing, factoring, mutual funds, merchant banking, stock lending, depository, credit cards, housing finance and book building. These services are provided by stock exchanges, specialized and general financial institutions, and banks and insurance companies and are regulated by the Securities and Exchanges Board of India (SEBI), Reserve Bank of India and the Department of Banking and Insurance, Government