U.S. commercial and investment banks do not have as much freedom as foreign
banks, which has led many U.S. banks to establish subsidiaries in Europe that can
offer a wider range of services. All this has increased global competition in the
financial services industry.
What is a multinational corporation?
Why do companies “go global”?
Multinational versus Domestic Financial Management
In theory, the concepts and procedures discussed in earlier chapters are valid for both
domestic and multinational operations. However, six major factors distinguish finan-
cial management in firms operating entirely within a single country from firms that
operate globally:
548 CHAPTER 15 Multinational Financial Management
FIGURE 15-1 Direct Investment for the United States, 1982–2000
Source:Maria Borga and Raymond J. Mataloni, Jr., “Direct Investment Positions for 2000, Country and Industry Detail,” Survey of Current Business,
July 2001, 16–29. See http://www.bea.doc.gov/bea/pubs.htmfor updates.
800
700
600
500
400
300
200
100
0
19821983198419851986198719881989199019911992199319941995199619971998
Year
Dollars
(Billions)
U.S. Direct Investment Abroad
Foreign Direct Investment
in the United States
1,000
900
1999 2000
1,100
1,200
1,300
542 Multinational Financial Management
