Not eligible for exchange students!
This course introduces the main international aspects that are relevant for firms involved in international business transactions and discuss sepcial features of the European integration process. The global business environment involves trade, international investment and foreign exchange operations. The topics covered in the course explore how economic linkages between countries affect the optimal decision of firms and how they affect domestic economic developments. European aspects focus on trade integration and the monetary unification process.
1. The Global World Economy as the Environment of International Business
Globalization: the meaning, the reasons, and the implications
Globalization and international business
How international transactions are recorded countrywide
A case study
2. International Trade
Opening case: The case of Ghana and Kenya
Why do countries trade?
What are the consequences of trade: Who wins and who loses?
Closing case: Trade in information technology and U.S. economic growth
3. Trade policy: Does it make sense?
Instruments of trade policy and their effects
Who wins and who loses
What position should international business adopt?
4. Foreign Direct Investment: Rationale and Policies
The different forms of FDI
The empirical evidence
Why FDI when there are alternatives?
Case studies: German carmakers in the U.S.A.
5. Regional Economic Integration and the European Economy
Different levels of regional economic integration
Does regional integration make sense?
How different are European countries?
The common agricultural policy
6. Trade Integration in Europe: The Rationale and Consequences of the Single European Market
The content of the Single European Market (SEM)
The expected effects of the SEM
The implications of the SEM for international business
Closing cases: NAFTA and the US; Agricultural subsidies and development; Drug development in the EU
7. The Foreign Exchange Market (Part I)
The foreign exchange market as the reflection of international transactions
Characteristics of the foreign exchange market
Different exchange rate systems
8. The Foreign Exchange Market (Part II)
What determines the spot exchange rate and what the forward exchange rate?
Case study: The curse of the strong Dollar at STMicro
9. Monetary Integration in Europe: European Monetary Union (EMU)
Benefits and costs of monetary unification
The EMU and its further expansion
Business effects of EMU
The course combines lectures, discussions and smaller case studies.
Theories of International Trade, International Investment, Exchange Rate Operations, European Trade Integration and Monetary Unification
Hill, C., International Business - Competing in the Global Marktplace, 7th edition.
Up-to-date newspaper and magazine clippings will be distributed during the course.
Method of examination
Grades will be based on a group project (30 percent), class participation (10 percent) and a final exam (60 percent).