Managing International Trade and Investment
Course Number 1166
Professor of Management Practice Dante Roscini
Fall; Q1Q2; 3 credits
This course is intended for anyone that will work in a company that has international assets and operations. In particular it is designed for students who expect their careers to involve decisions related to cross border commerce and investment of either an industrial or a financial nature. It is relevant to those who are likely to engage directly or indirectly in trade, minority or majority investments, acquisitions or partnerships across national borders and want to acquire tools to best interpret the unfamiliar landscape they might face.
Markets and industries can vary dramatically across national borders and, increasingly, political and economic events across the globe shape the issues faced by managers in a vast array of industries. This course is about how to recognize and analyze the risks and opportunities inherent in doing business abroad. For many high-level managers and investors, understanding the global macro issues - and the related politics - is what will make the difference between success and failure.
Doing business across borders entails a whole new set of managerial challenges and opportunities: reassessing competitive advantage; evaluating diverse political environments and legal structures; considering the impact of different policies and regulations; assessing currency and other financial risks; considering trading regimes; as well as understanding widely disparate cultures and business norms.
MITI's framework of analysis is based on a systematic evaluation of the informal and formal rules that define the markets for goods, services, and capital. A broad range of real life situations in a wide variety of contexts is analyzed through company cases that are seen through the eyes of managers and investors rather than those of policymakers.
After a high level examination of what it means for firms to be participants in the global economy, the course will develop into three main modules.
The first module focuses on International Trade and in particular on the politics and the rules associated with it. We explore how local and global politics influence trade developments and the role that formal institutions, such as the WTO, as well as informal institutions, play in shaping the rules that govern exporting and importing among nations. We will also look at the impact of the rise of regional trade agreements and in particular the potential consequences of the "super-RTAs" currently under negotiation among some of the world's economic powers.
The second module concentrates on Foreign Direct Investment. FDI captures a very wide spectrum of activities by firms that look to expand internationally. These might include minority and majority investments, Greenfield or Brownfield investments, purely private or public/private ventures, acquisitions or partnerships and joint ventures. By looking at successes and failures in an assortment of industries, we will examine the complexities of making such decisions in a cross border context and how to predict and navigate key factors such as evolving national regulations, local political agendas, government relations and economic and financial developments.
The third module investigates Portfolio Investment. In a world where capital moves quickly and financial markets across asset classes and geographies are ever more interconnected, investing internationally must account for the potential evolution of the macro scenario. Major opportunities or disappointments can result from understanding or failing to understand the consequences of monetary and fiscal policy decisions made far away from home or the change in macroeconomic variables in other parts of the world. In several of this module's sessions we will avail ourselves of selected senior guest speakers from the world of international finance that will share their views, including those on the most current financial market developments.