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 or that invests transnationally. It is designed for 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. It is also relevant for students who expect their careers to involve investing in financial assets and want to explore the relationship between macroeconomic developments and the financial markets.
Markets and industries can vary dramatically between nations and, increasingly, political and economic events across the globe shape the issues faced by managers and investors in a vast array of industries. This course is about how to recognize and analyze the risks and opportunities inherent in doing business or investing 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, macro and other financial risks; considering trade 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 and geographies, 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 and international regulations, local and global political agendas, government relations and economic and financial developments but also how to take into account the social and cultural aspects of the target markets. If possible, case protagonists come to class.
The third module investigates Portfolio Investment. In a world where capital moves quickly and financial markets across asset classes and jurisdictions 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 or the change in macroeconomic variables. 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 on macro investing and discuss the most current financial market developments. Past guests have included the Chief Strategist of JP Morgan Asset Management, the Chief Economist of GE, the Chief Economist of PIMCO, the CIO of Omega Advisors and the Head of European Economics Research at Goldman Sachs.