What is it about?
This paper reviews the theory and evidence on the effects of globalization of financial transactions on businesses. Two important benefits are identified. First, globalization reduces a company’s cost of capital. Second, globalization improves corporate governance so that manager actions are better aligned with shareholder interests. This improvement in corporate governance further contributes to a reduction in a firm’s cost of capital.
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Why is it important?
The paper is a review essay written for the lay person. It is a good non-technical introduction to this subject.
Perspectives
This is my first essay on international finance.
Professor Utpal Bhattacharya
Hong Kong University of Science and Technology
Read the Original
This page is a summary of: THE EFFECT OF GLOBAL FINANCIAL MARKETS ON BUSINESSES, Emerald,
DOI: 10.1016/s1064-4857(03)08011-2.
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