International financial management
c business environment; that is, trading and making money through the exchange of foreign currency. The international financial activities help the organizations to connect with international dealings with overseas business partners- customers, suppliers, lenders etc. It is also used by government organization and non-profit institutions.
History and background
During the post-war years, the GATT was established in order to improve trade. It removed the trade barriers notably over the years, as a result of which international trade grew manifold. The financial participation of the trader's exporters and importers and the international transactions flowed significantly. It started when different countries started “liberalizing” i.e. when countries agreed to open doors for each other and traded. The advancement of technology and liberalization resulted in the idea of financial management both domestically and globally.
Domestic vs international financial management (IFM)
Financial Systems may be classified as domestic or overseas, closed or open. A ‘domestic’ is one inside a country. Thus financial system in the
Importance
Compared to national financial markets international markets have a different shape and analytics. Proper management of international finances can help the organization in achieving same efficiency and effectiveness in all markets, hence without IFM sustaining in the market can be difficult.
Companies are motivated to invest capital in abroad for the following reasons
References
- ↑ "Difference between International and Domestic Financial Management:". Retrieved 27 September 2012.
Category:Finance