Managing International Trade and Investment

Course Number 1166

Professor of Management Practice Dante Roscini
Fall; Q1Q2; 3 credits
25 Sessions
Paper
Associate Professor Meg Rithmire
Spring; Q3Q4; 3 credits
28 Sessions
Exam

Career Focus

MITI is relevant for anyone who will pursue a career in an industrial or service company that has international assets and operations, who may engage in various forms of foreign direct investment and wants to learn how to interpret the unfamiliar landscape they might face. It is also for those students who expect to participate in the global financial markets through the liquid capital markets and want to explore the impact of economic and geopolitical developments on various asset classes.

Educational Objectives

The course aims to teach how to recognize, assess and manage the risks and opportunities inherent in doing business or investing abroad. Markets and industries can vary dramatically between nations and for managers and investors, understanding the differences will be a primary determinant of success.

Managers that do business across borders need a whole new set of skills: reassessing competitive advantage; evaluating diverse political environments and legal structures; considering the impact of different policies and regulations; assessing currency, sovereign, credit and other financial risks; bearing in mind trade regimes; as well as understanding widely disparate cultures, regulations and business norms. Investors that transact internationally must acquire an understanding of how to analyze and interpret global macro issues and their likely impact on various asset classes in a world where fast-changing global political and economic events continuously shape financial markets.

MITI's practical framework of analysis hinges on a systematic evaluation of the informal and formal rules that define the markets for goods, services, and capital. We analyze real-life situations in a broad range of contexts and geographies through company cases. We also make use of carefully selected guest speakers. The goal is to see the issues through the eyes of managers and investors rather than mostly through those of policymakers, as was often the case in BGIE.

Course Content

After a high-level examination of what it means for firms to be participants in the global economy, the course will develop into three 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 evolving role that formal, as well as informal institutions, play in shaping the rules that govern exporting and importing among nations. We will examine how such rules are being challenged by the current backlash against globalization and the trade wars. Previous class guests in this module included the US Assistant Secretary of State for the Bureau of Economic and Business Affairs and the Chairman of the US-China Business Council.

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 projects, acquisitions or partnerships and joint ventures. By looking at successes and failures in a wide assortment of industries and geographies, we examine the complexities of making such decisions in a cross-border context. We learn how to predict and navigate key risks such as evolving national and international regulations, local and global political agendas, government relations and economic and financial developments but we also learn how to take into account the social and cultural aspects of the target markets. Whenever possible, the case protagonists will 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, international investing must account for the potential evolution of the macro scenario. Major opportunities or disappointments can result from the degree of understanding of the consequences of monetary and fiscal policy decisions or the change in macroeconomic variables. In several of this module’s sessions, we avail ourselves of selected senior players from the world of international finance that will share their views on global macro investing and discuss the most current financial market developments and outlook. Past guests have included, among others, the Chief Strategist of JP Morgan Asset Management, the Chief Economist of GE, the Chief Economist of PIMCO, the Chief Investment Officer of Omega Advisors, the Head of International Economics Research at Goldman Sachs, the Chief Macro Strategist of Perella Weinberg, the Chief Equity Strategist of Rockefeller & Co, the CIO of Franklin Templeton and the Greek Finance Minister.