Manajemen Keuangan

Internasional

01
Modul ke:

Fakultas Multinational Financial Management:

Ekonomi dan
An Overview
Bisnis
Program Studi
S-1 Manajemen
Dr. Endri., SE., ME
Pembuka Daftar Pustaka Akhiri Presentasi
 Pendahuluan
• International financial management, also
known as international finance, is the
management of finance in an international
business environment; that is, trading and
making money through the exchange of
foreign currency.

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• To
iden
tify
Chapter Objectives
the
mai
n
goal
of
the
mul
tina
tion
al
corp
• The
com
mo
Goal of the MNC
nly
acce
pte
d
goal
of
an
MN
C is
to
max
 Conflicts Against the MNC Goal

• For corporations with shareholders who

differ from their managers, a conflict of
goals can exist - the agency problem.
• Agency costs are normally larger for MNCs
than for purely domestic firms.
– The sheer size of the MNC.
– The scattering of distant subsidiaries.
– The culture of foreign managers.
– Subsidiary value versus overall MNC value.
• The
mag Impact of Management Control
nitu
de
of
age
ncy
cost
s
can
vary
with
the
man
 Centralized Multinational Financial Management

for an MNC with two subsidiaries, A and B

Cash Financial Cash

Management Managers Management
at A of Parent at B

Inventory and Inventory and

Accounts Accounts
Receivable Receivable
Management at A Management at B

Financing at A Financing at B

Capital Expenditures Capital Expenditures

at A at B
 Decentralized Multinational Financial Management

for an MNC with two subsidiaries, A and B

Cash Financial Financial Cash

Management Managers Managers Management
at A of A of B at B

Inventory and Inventory and

Accounts Accounts
Receivable Receivable
Management at A Management at B

Financing at A Financing at B

Capital Expenditures Capital Expenditures

at A at B
• Som
e Impact of Management Control
MN
Cs
atte
mpt
to
strik
ea
bala
nce
-
they
allo
• Elec
tron Impact of Management Control
ic
net
wor
ks
mak
e it
easi
er
for
the
pare
nt
• Vari
ous Impact of Corporate Control
for
ms
of
corp
orat
e
cont
rol
can
red
uce
age
• As
MN
Constraints
C Interfering with the MNC’s Goal
man
ager
s
atte
mpt
to
max
imiz
e
thei
r
 Theories of International
Business
Why are firms motivated to expand their
business internationally?

Theory of Comparative Advantage

– Specialization by countries can increase
production efficiency.
Imperfect Markets Theory
– The markets for the various resources used in
production are “imperfect.”
 Theories of International
Business
Why are firms motivated to expand their
business internationally?

Product Cycle Theory

– As a firm matures, it may recognize additional
opportunities outside its home country.
 The International Product Life Cycle

 Firm creates product  Firm exports product to

to accommodate local accommodate foreign  Firm
demand. demand. establishes
foreign subsidiary
to establish
presence in
foreign country
and possibly to
a. Firm differentiates reduce costs.
or
product from competitors
and/or expands product b. Firm’s foreign
line in foreign country. business declines as its
competitive advantages
are eliminated.
 International
Business Methods
There are several methods by which firms can
conduct international business.
• International trade is a relatively
conservative approach involving exporting
and/or importing.
– The internet facilitates international trade by
enabling firms to advertise and manage orders
through their websites.
• Lice
nsin International
g
allo Business Methods
ws a
firm
to
prov
ide
its
tech
nolo
gy
in
• Firm
s International
may
also Business Methods
pen
etra
te
fore
ign
mar
kets
by
eng
agin
 International
Business Methods
• Firms can also penetrate foreign markets by
establishing new foreign subsidiaries.
• In general, any method of conducting
business that requires a direct investment
in foreign operations is referred to as a
direct foreign investment (DFI).
• The optimal international business method
may depend on the characteristics of the
MNC.
Degree of International Business by MNCs

Foreign Sales as a % of Total Sales

Foreign Assets as a % of Total Assets
66%
70% 62% 58%
60% 50%
46% 47%
50% 40%
40% 33%
30%
26%
20% 12%
10%
0%
Campbell's Dow IBM Motorola Nike
Soup Chemical
• Che
ck
out
Online Application
the
follo
win
g
inte
rna
tion
al
trad
e
pro
http://www.tradenet.gov
http://www.business.gov/busadv/in
dex.cfm
 http://www.trade.gov
http://www.export.gov
• Inve
stm
ent
International Opportunities
opp
ortu
nitie
s-
The
mar
gina
l
retu
rn
on
 International Opportunities
Cost-benefit Evaluation for
Purely Domestic Firms versus MNCs

Purely
Investment
Domestic
Opportunities MNC
Marginal Firm
Return on
Projects MNC
Purely
Marginal Domestic
Cost of Firm
Capital
Financing Appropriate Size
Opportunities for Purely Appropriate Size
Domestic Firm for MNC

X Y Asset Level
of Firm
• Opp
ortu
nitie
International Opportunities
s in
Eur
ope
–T
h
e
Si
n
gl
e
E
ur
• Opp
ortu
nitie
International Opportunities
s in
Asia
–T
h
e
re
d
uc
ti
o
n
of
• For
mor
e
Online Application
info
rma
tion
on
the
Asia
n
crisi
s,
che
ck
 Exposure to International Risk

International business usually increases an MNC’s

exposure to:
exchange rate movements
– Exchange rate fluctuations affect cash flows
and foreign demand.
foreign economies
– Economic conditions affect demand.
political risk
– Political actions affect cash flows.
 Exposure to International Risk
U.S. Firm’s Cost of Obtaining £100,000

$165,000

$160,000

$155,000

$150,000

$145,000

$140,000

$135,000

$130,000
Jan Mar May Jul Sep Nov Jan Mar May
2000 2001
• Visit
FRE
D®,
Online Application
Fed'
s
eco
no
mic
tim
e-
seri
es
data
bas
 Overview of an MNC’s Cash
Flows
Profile A: MNCs focused on International Trade

Payments for products U.S. Customers

U.S.- Payments for supplies U.S. Businesses

based
MNC
Payments for exports Foreign Importers

Payments for imports Foreign Exporters

 Overview of an MNC’s Cash
Flows
Profile B: MNCs focused on International Trade and International
Arrangements

Payments for products U.S. Customers

Payments for supplies U.S. Businesses

U.S.-
based
Payments for exports Foreign Importers
MNC
Payments for imports Foreign Exporters

Fees for services

Foreign Firms
Costs of services
 Overview of an MNC’s Cash
Investment
Flows
Profile C: MNCs focused on International Trade, International Arrangements, and Direct Foreign

Payments for products U.S. Customers

Payments for supplies U.S. Businesses

U.S.- Payments for exports Foreign Importers

based
MNC Payments for imports Foreign Exporters

Fees for services

Foreign Firms
Costs of services
Funds remitted
Foreign Subsidiaries
Funds invested
• Like
do Managing for Value
mes
tic
proj
ects
,
fore
ign
proj
ects
invo
lve
an
 Valuation Model for an MNC

• Domestic Model
n
E  CF$, t 
Value = 
t =1 1  k  t

E (CF$,t ) = expected cash flows to be received at the

end of period t
n = the number of periods into the future in which
cash flows are received
k = the required rate of return by investors
 Valuation Model for an MNC
• Valuing International Cash Flows
m 
n 

E  CFj , t   E ER j , t   
 j 1 
Value =   
t =1   1  k  t

 
E (CFj,t ) = expected cash flows denominated in
currency j to be received by the U.S. parent at the end of
period t
E (ERj,t ) = expected exchange rate at which currency j
can be converted to dollars at the end of period t
k = the weighted average cost of capital of the U.S.
parent company
• An
MN Valuation Model for an MNC
C’s
fina
ncia
l
deci
sion
s
incl
ude
how
muc
h
 Valuation Model for an MNC
Impact of New International Opportunities
on an MNC’s Value

Exposure to
Foreign Economies Exchange Rate Risk

m 
n 

E  CFj , t   E ER j , t   
 j 1 
Value =   
t =1   1  k  t

 

Political Risk
 How Chapters Relate to
Valuation
Exchange Rate
Behavior Exchange Rate Risk
(Chapters 6-8) Management
(Chapters 9-12)
Background on
International Long-Term
Financial Investment and
Markets Risk and Value and
Financing Decisions Return of Stock Price of
(Chapters (Chapters 13-18)
2-5) MNC MNC

Short-Term
Investment and
Financing Decisions
(Chapters 19-21)
• Goa
l of
the
Chapter Review
MN
C
–C
o
n
fli
ct
s
A
ga
in
st
• Inte
rna Chapter Review
tion
al
Busi
ness
Met
hod
s
– In
te
rn
a
ti
• Inte
rna Chapter Review
tion
al
Opp
ortu
nitie
s
– In
ve
st
m
e
nt
• Exp
osur Chapter Review
e to
Inte
rna
tion
al
Risk
– Ex
p
os
ur
e
to
• Valu
atio Chapter Review
n
Mo
del
for
an
MN
C
–D
o
m
es
tic
 Daftar Pustaka
Eitman, David. et.al. 1995, Multinational Business Finance. USA: Addison- Wesley
Publishing Company
Faisal, M. 2001, Manajemen Keuangan Internasional; dengan penekanan praktek pada
pasar devisa, Edisi Pertama. Salemba Empat.
Madura, Jeff. 2003, International Financial Management, Edisi Ketujuh, Thomson South-
Western.
Mamduh M, Hanafi. 2003, Manajemen Keuangan Internasional, Edisi 2003/2004, BPFE-
UGM
Mudrajat Kuncoro. 2001, Manajemen Keuangan Internasional, edisi 2, BPFE, Yogyakarta,
2001
Hamdy Hadi.2001, Valas Untuk Manajer, Ghalia Indonesia, Jakarta, 2001
Shapiro, Alan C. 2003, Multinational Financial Management, Edisi Ketujuh. John Wiley &
Sons.
 

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Terima Kasih
Dr. Endri., SE., ME