Managing International Trade and Investment

Course Number 1166

Associate Professor J. Gunnar Trumbull
Fall, 29 Sessions
Exam

Career Focus

This course is intended for students who expect their careers to be influenced by trends in international trade and investment. Many HBS graduates will engage directly in commerce and finance across national borders. Increasingly, political and economic events abroad shape the opportunities and constraints faced by managers in industries such as investment banking, private equity, fund management, and consulting.

Educational Objectives

This course is about the politics of the global economy and about how firms prosper by understanding those politics, or fail by misunderstanding them. Understanding the politics of globalization may once have been a luxury; it is now, for most high-level managers, simply a necessity. Despite the ease with which it is often conducted, doing business across borders is not the same as doing it at home. Rather, it entails a whole new set of managerial challenges: reassessing competitive advantage; evaluating diverse political environments and legal structures; considering the impact of currency fluctuations and trading regimes; and understanding widely disparate cultures and business norms. The purpose of MITI is to build a framework of analysis that enables managers to understand the challenges of international trade and investment and to master the opportunities they represent. MITI's framework of analysis is based on a systematic evaluation of the informal and formal rules that define markets for goods, services, and capital.

Course Content

The course consists of five inter-related modules. The first module, Firms in the Global Economy, consists of a series of readings and cases that deal with the foundations of the global economy and the role of firms within it. Discussions focus on the political and economic origins of our current era of globalization and how the rules that constrain and enable firms are changing.

The second module, The Rules of the Game, focuses on national policies that shape flows of goods and capital. Using a series of company-based cases, we investigate different logics of national regulation, and the tools that firms have available for predicting, avoiding, or even employing the long arm of government policy.

The third and fourth modules, The International Financial Architecture and The Politics and Rules of International Trade, shift our analysis to institutions at the international level. We explore how informal institutions, such as the standards created by credit rating agencies and the norms promoted by social movements, and formal institutions, such as the WTO, IMF, OECD, and EU, influence the opportunities for success in international finance and trade.

MITI ends with a capstone module called International Trade and Investment in the Age of Information. Information-based industries are among the fastest growing segment of international trade. But the trade they entail is new, and the product-information--relies heavily on systems of contracts and property rights that vary widely across national borders. We will consider how firms can best manage the inherent uncertainties in such industries in order to gain a competitive and sustainable advantage in the international marketplace for information-based goods and services.

The course has a final exam.