1 International Financial Management | The University of Tulsa

International Financial Management

Syllabus

Siegen, November 17-27, 2018 J. Markham Collins, PhD

All the readings except for those in the primary textbook, Eun, Cheol S., Resnick, Bruce G.

(2015). International Financial Management, 7th

Ed. McGraw-Hill (or Eun, Cheol S., Resnick,

Bruce G. [2012]. International Financial Management, 6th Ed. McGraw-Hill,)and the article by

Michael Porter can be found at this site:

http://www.box.com/shared/e46u22z8ud

There are assignments listed with the course and these should be done to discuss in class.

CASES:

Harvard Business Cases and the Porter article can be purchased through Harvard Business Online:

https://hbsp.harvard.edu/import/580323

The name of our course in Harvard is Int Fin Mgt Siegen 2018-1.

Just go to that link, register, and purchase the on-line course pack. It costs about € 11.00. You need something from this site before the class starts.

I. Introduction to Trade, Global Investment, the International Monetary

System Article:

Porter, “Competitive Advantage of Nations,”from Harvard.Read this prior to the start of

class.

Book Chapters:

Appleyard et al. (2010) – Chapter 20, pp. 476-506

Eun & Resnick (2015) – Chapter 2, pp. 27-61

Or Eun & Resnick (2012) – Chapter 2, pp. 29-63

Power Point lessons: Part 1

II. Exchange Rates and Parity Conditions Book Chapters:

Appleyard, Chapter 20, pp. 476-506 & Chapter 28, pp. 713-738

Shapiro (2010). Chapter 2, pp. 57-98

Eun & Resnick (2015) – Chapter 5, pp. 112-139 & Chapter 6, pp. 140-172

Or Eun & Resnick (2012) – Chapter 5, pp. 112-138& Chapter 6, pp. 139-171

Power Point lessons: Part 2 through 4

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III. The Optimal Currency Area and the Euro

Book Chapters:

Shapiro, Chapter 3, pp. 99-134

Appleyard, Chapter 29, pp. 739-774

Readings: Dr. Collins will have lecture notes to present on all these readings. Students should read them, preferably prior to those presentations.

Mundell (1961)

Kenen (1966)

McKinnon (1963)

Mundell (1998)

Mundell (1999)

Vasiliauskaitė, et al. (2007)

Kotil et al. (2009)

Zhao and Kim (2009)

Mundell (2002)

Power Point Lessons: Part 5 and 6.

IV. Managing Translation and Transaction Currency Exposure

Book Chapters:

Shapiro, Chapter 10, pp.354-402

Eun & Resnick (2015), Chapter 8, pp. 198-224& Chapter 10, pp. 245-263

Or Eun & Resnick (2012), Chapter 8, pp. 197-226& Chapter 10, pp. 248-265

Power Point Lessons: Part 7

Readings:Dr. Collins will have lecture notes to present on all these readings. Students should read them, preferably prior to those presentations.

Goldberg, S., & Drogt, E. (2008)

Collins (2010)

V. Economic Exposure

Book Chapters:

Shapiro, Chapter 11, pp.403-449

Eun & Resnick (2015), Chapter 9, pp. 225-244

Eun & Resnick (2012), Chapter 9, pp. 227-247

Readings:

3 International Financial Management | The University of Tulsa

Collins (2010)

Power Point Lessons: Part 8 Case Studies:In the U.S. educational system, cases are discussed. Students need to read and do analysis

prior to the class discussion.

Lufthansa: To Hedge or Not to Hedge

McDonalds Corporation’s UK Pound Exposure

Porsche Exposed

VI. Foreign Direct investment

Book Chapters:

Eun & Resnick (2015), Chapter 16, pp. 404-430

Or Eun & Resnick (2012), Chapter 16, pp. 408-434

Readings:

Shapiro (1985)

Power Point Lessons: Part 9

Listed References: These are only here for students who become interested in these topics and

want to add to their knowledge or write a thesis in this area. We will not cover these references in

the course.

Appleyard, D., Field, A., Cobb, S. (2009). International Economics. McGraw-Hill

Choi, J., & Jiang, C. (2009). Does multinationality matter? Implications of operational hedging for the

exchange risk exposure. Journal of Banking & Finance, 33(11).

Collins, J. Markham (2010). Determinants of Economic Exchange Rate Exposure. Working Paper, 2010.

Eun, Cheol S., Resnick, Bruce G. (2009). International Financial Management. McGraw-Hill

Goldberg, S., & Drogt, E. (2008). Managing Foreign Exchange Risk. Journal of Corporate Accounting &

Finance (Wiley), 19(2), 49-57.

Kenen, Peter B. (1966). The Theory of Optimum Currency Area: An Eclectic View. In Monetary

Problems of the International Economy, Mundell, Robert A. and Swoboda, Alexander K. Eds. University

of Chicago Press, 1969.

Kotil, Erdogan; Konur, Fatih; Çakici, Kemal (2009). Assessment of the Euro Zone According to the

Criteria of the Theory of Optimum Currency Areas. International Research Journal of Finance &

Economics, Issue 27, p29-39, 11p

McKinnon, Ronald I (1963). Optimum Currency Areas. American Economic Review, Vol. 53 Issue 4,

p717, 9p

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Mundell, Robert A. (1961). A Theory of Optimum Currency Areas. American Economic Review, Vol. 51

Issue 4, p657, 9p

Mundell, Robert A. (1998). What the Euro Means for the Dollar and the International Monetary System.

Atlantic Economic Journal, Sep98, Vol. 26 Issue 3, p227, 11p

Mundell, Robert A. (1999). The Euro: How Important? CATO Journal, Vol. 18 Issue 3, p441, 4p

Mundell, Robert A. (2002). Does Asia Need a Common Currency Market? Pacific Economic Review,

Vol. 7 Issue 1, p3, 10p

Shapiro, Alan C. (1985). Corporate Strategy and the Capital Budgeting Decision, Midland Corporate Finance Journal, Spring 1985. Reprinted in The Revolution in Corporate Finance (editors, Joel Stern and

Donald Chew), Basil Blackwell, 1998

Shapiro, Alan C. (2010). Multinational Financial Management. John Wiley & Sons, Inc.

Vasiliauskaitė, A., Vitkauskas, M. (2007). TheAttainability Analysis to Complete requirements of

Optimum Currency Area with EU. Economics & Management, 2007, p261-268, 8p

Quah, Chee-Heong (2009). The Feasability of East Asian Monetary Union as an Optimum Currency

Area. International Journal of Asia-Pacific Studies, Vol. 5 Issue 2, p65-90, 26p

Zhao, X., Kim, Y. (2009). Is the CFA Franc Zone an Optimum Currency Area? World Development, Vol.

37 Issue 12, p1877-1886, 10p

Recommended Readings

Cesarano, F. (2006). The Origins of the Theory of Optimum Currency Areas. History of Political

Economy, Winter2006, Vol. 38 Issue 4, p711-731, 21p

Dellas, Harris; Tavlas, George S. (2009). An optimum-currency-area odyssey. Journal of International

Money & Finance, Vol. 28 Issue 7, p1117-1137, 21p

Frankel, Jeffrey A.; Rose, Andrew K. (1998). The Endogeneity of the Optimum Currency Area

Criteria,Economic Journal, Vol. 108 Issue 449, p1009-1025, 17p

Frankel, Jeffrey; Rose, Andrew (2002). An Estimate of the Effect of Common Currencies on Trade and

Income, Quarterly Journal of Economics, Vol. 117 Issue 2, p437-466, 30p

Hutson, Elaine; O’Driscoll, Anthony (2010). Firm-level exchange rate exposure in the

Eurozone,International Business Review, Vol. 19 Issue 5, p468-478, 11p

Kenen, Peter B. (1997). Common currencies versus currency areas. American Economic Review, Vol. 87

Issue 2, p211, 3p

Kenen, Peter B. (2010). There Was No Analytical Alternative to the Theory of Optimum Currency Areas.

Econ Journal Watch, Vol. 7 Issue 1, p73-75, 3p

Kenen, Peter B. (2003). Making the Case for The Euro. International Economy, Vol. 17 Issue 1, p51, 4p

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Makar, Stephen D.; Huffman, Stephen P. (2008). UK Multinationals' Effective Use of Financial

Currency-Hedge Techniques: Estimating and Explaining Foreign Exchange Exposure Using Bilateral

Exchange Rates, Journal of International Financial Management & Accounting, Vol. 19 Issue 3, p219-

235, 17p

McKinnon, Ronald I. (1994). A Common Monetary Standard or a Common Currency for Europe? Fiscal

lessons from the United States, McKinnon, Ronald I. Scottish Journal of Political Economy, Vol. 41 Issue

4, p337, 21p

McKinnon, R. (2002). Optimum Currency Areas and the European Experience, Economics of Transition,

Vol. 10 Issue 2, p343-364, 22p

McKinnon, Ronald I. (2002). Money and Finance on the Periphery of the International Dollar Standard,

International Journal of Finance & Economics, Vol. 7 Issue 2, p87-96, 10p

McKinnon, Ronald I. (2004). Optimum Currency Areas and Key Currencies: Mundell I versus Mundell

II, Journal of Common Market Studies, Vol. 42 Issue 4, p689-715, 27p

Mishra, R. K., Sharma, C. (2010). Real Exchange Rate Behavior and Optimum Currency Area in East

Asia: Evidence from Generalized Purchasing Power Parity, International Review of Financial Analysis,

Vol. 19 Issue 3, p205-213, 9p

Mundell, Robert A. (1960). The Monetary Dynamics of International Adjustment under Fixed and

Flexible Exchange rates,Quarterly Journal of Economics, Vol. 74 Issue 2, p227-257, 31p

Mundell, Robert A. (1973). Uncommon Arguments for Common Currencies, In H.G. Johnson and A.K.

Swoboda, eds., The Economics of Common Currencies (115-132). Harvard University Press, Cambridge.

Mundell, Robert A. (2000). Currency Areas, Volatility and Intervention. Journal of Policy Modeling, Vol.

22 Issue 3, p281, 19p

Ozer, I., Ozkan, I., Aktan, Okan H. (2007). Optimum Currency Areas Theory: An Empirical Application

to Turkey, South East European Journal of Economics & Business; Issue 4, p75, 14p

Shapiro, A., & Rutenberg, D. (1976). Managing Exchange Risks in a Floating World, Financial

Management (1972), 5(2), 48-58.

Silvestre, João; Mendonça, António (2007). The Endogeneity of Optimum Currency Areas Criteria: Some

Evidence from the European Union and Portugal. International Advances in Economic Research, Vol. 13

Issue 1, p1-18, 18p