DISCUSSION BOARD

Discussion Board

Discussion Board

Organization Recommendation

For the purpose of our analysis, we will compare France, which is a member of the European Union and India, which is located in South East Asia. For Acme Corporation, which  looks to set up a Greenfield project in a foreign country, my choice would obviously be India as compared to France because of the tremendous business opportunity offered by Indian markets.

In the last few years, India has emerged as one of the fastest growing emerging markets and is already one of the largest and fastest growing market in the world due to its large population and tremendous growth across all sectors and per capita income.

There is a huge inflow of foreign direct investment in India in all sectors and more and more global companies are pumping money into the Indian economy to take advantage of the comparative advantage offered by India. India has already emerged as a global player in information technology and outsourcing related activities due to the significant comparative advantage offered by the country in terms of low cost of production, adequate availability of qualified and skilled english speaking population and host of other factors such as locational advantage, which really makes it a unique country to set up operations.

Capital Inflow to Emerging Economies

Two years after the most severe global financial crisis in decades, financial markets are flush with liquidity, aided by ample monetary stimulus from central banks around the world. Emerging market economies are experiencing large inflows of capital that drive up their exchange rates and inflate asset prices.

Policymakers in the affected economies are justifiably worried about the consequences. Indeed, as Reinhart and Reinhart (2008) have pointed out, such “capital flow bonanzas” are all too often followed by severe crashes that impose massive social costs. A growing chorus of academics, perhaps most famously represented by Stiglitz (2002), has argued that capital flows to emerging markets should therefore be regulated.

Risky forms of capital inflows create externalities because individual borrowers find it optimal to ignore the effects of their financing decisions on aggregate financial stability. They take the risk of financial crisis in their economy as given and do not recognize that their individual actions contribute to this risk.

Best international bank that offer multinational cash management services

Since, Acme will have subsidiaries in South America and Asia that will import materials and export assembled parts so it will need efficient-multinational cash management ...