Dr. P.V. Viswanath

pviswanath@pace.edu

FIN 649: International Corporate Finance
Assignments, Summer 2005

Assignments must be typed and submitted before the start of class on the due date.

Assignment 1 (Individual or Group)

Rivoli, Pietra. 2005. "The Travels of a T-shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade," John Wiley and Co., Hoboken, N.J.

Answer the following questions:

1. Is garment manufacturing labor intensive or capital intensive? Does your answer depend on the location and the time-period involved? If so, identify different time-place combinations and explain, illustratively, which are labor and which are capital intensive.
2. Which time-place combinations prove (i.e. illustrate) the Hecksher-Ohlin theory? Which disprove it?
3. In class, we discussed the Leontief Paradox. Does the export of used clothes from the US to Africa provide another example of the Leontief Paradox? Support your position.
4. Which multinational firms does the book discuss? Are there other MNCs in the garment industry (any part of it – manufacturing, distribution, retailing)? How have these MNCs adapted to the regulatory barriers erected by various countries, primarily the US?
5. In his book, “The Competitive Advantage of Nations,” Michael Porter talks about how governments of countries can influence the comparative advantage that those countries have (see http://www.valuebasedmanagement.net/methods_porter_diamond_model.html for an overview). Where is this illustrated in Pietra Rivoli’s book?
   

Assignment 2 (Individual or Group)

Choose any company with an international presence and discuss how it has dealt with accounting, transaction and economic exposure. You can focus on any one or more of these three areas. Your write-up need not be more than three or four pages. You may (and should) use publicly available information. However, you should not copy somebody else's analysis without attribution. You may cite, with attribution, any published analyses of your company's foreign exchange exposure management; you should, in any case, have your own original analysis, as well.

Example from Fall 2004 (No implication as to how you should or should not write your own report. Keep in mind, however, that plagiarizing from existing reports is bad, and can be cause for a failing grade in the course.)

Assignment 3 (Group)

Read any one of the articles below (1. through 5. only); write a one to two page summary of the arguments presented therein. On the last day of class, your group will be required to present the article in no more than fifteen minutes, using powerpoint slides. Each member of the team will have to participate in the presentation to some extent. At the end of all the presentations, there will be a general discussion.

1. Bekaert, Geert; and Campbell Harvey. 2002. "Emerging Markets Finance," Working Paper, Columbia University.
2. Bekaert, Geert; Campbell R. Harvey; and Christian Lundblad. 2004. "Does financial liberalization spur growth?," Working Paper.
3. Rajan, Raghuram G.; and Luigi Zingales. 1998. "Financial Dependence and Growth," The American Economic Review," vol. 88, no. 3, pp. 559-586.
4. Levine, Ross; and Sara Zervos. 1998. "Stock Markets, Banks, and Economic Growth," The American Economic Review, Vol. 88, No. 3. (Jun., 1998), pp. 537-558.
5. King, Robert G.; and Ross Levine. 1990. "Finance and Growth: Schumpeter Might be Right," The Quarterly Journal of Economics, Vol. 108, No. 3. (Aug., 1993), pp. 717-737.

The first four articles can be found on the course Blackboard site; the fifth article can be located on the library website by going to http://library.pace.edu and searching on the database JSTOR. (Go to library.pace.edu, then click on Articles via Databases, then choose the database JSTOR.)

Supplementary article

1. DeLong, J. Bradford. 2004. "Should We Still Support Untrammelled International Capital Mobility? Or are Capital Controls Less Evil than We Once Believed?," The Economists' Voice, v. 1, issue 1.

This article can be found on Blackboard, as well. However, this is only for supplementary reading -- you may not make a presentation on this article.