Sunday, October 6, 2019
International Finance Essay Example | Topics and Well Written Essays - 1750 words - 2
International Finance - Essay Example The first section highlights how General Electric suffered adversely because of the 2011 crisis in Japan that involved an earthquake, tsunami, and nuclear radiation. The second section of the paper involves calculations on covered interest arbitrage in order to investigate the amount of profit achieved and the amount of loss achieved by a corporate foreign investor.This paper stresses that The common characteristics of multinational enterprises include huge capital outlay, which contribute to the massive investments usually made by the MNEs. MNEs also have wide market presence in form of retail stores in numerous countries or subsidiary companies in numerous countries, a big workforce, and huge sales volume because of the wide market presence, wide and highly decentralized organisational structure. Lastly, MNEs have cultural diversity within their organisational setting. General Electric decides to venture into Japan through other subsidiaries such as Hitachi-GE Nuclear Energy Limite d because of the countryÃ¢â¬â¢s robust economy, which is ranked third Worldwide in terms of gross domestic product after the United States and China. This essay has identified that for a foreign company to decide to venture into another local market or country, the local market has to be endowed with various factors that make it a conducive business environment. Such an environment is most likely to favour the business operations of the foreign company, give it an opportunity to growth further, and increase it profitability level.