Question

What actions do you think a multinational firm can take to limit the impact of future crises in the global financial system on the ability of the enterprise to raise capital to pay its short-term bills and fund longterm investments? Hill, Charles W. L.. International Business: Competing in the Global Marketplace (p. 623). McGraw-Hill Higher Education. Kindle Edition.

Answer 1

To shield itself from the impacts of global financial crises, a multinational firm can diversify capital sources, establish varied banking relationships, practice effective risk management, focus on sustainable investments, and advocate for regulatory changes to manage foreign capital flows.

Step-by-step explanation:

To mitigate the impact of future crises in the global financial system, a multinational firm can implement several strategies to ensure it can raise capital for short-term liquidity and long-term investments. Firstly, the firm can diversify its sources of capital, reducing reliance on any one economy or currency. This might involve maintaining liquidity reserves in multiple currencies or investing in a range of financial instruments. Secondly, establishing strong relationships with multiple banks and investors can provide more options when access to capital becomes constrained. Thirdly, the firm should engage in thorough risk management practices, such as stress testing scenarios to understand potential impacts on capital accessibility.

Another approach is to focus on sustainable investments and long-term projects that might be more attractive to investors who have a medium to long-term focus, thus potentially avoiding the pitfalls of speculative short-term inflows. Furthermore, the firm can take a proactive role in advocating for regulatory changes to manage and direct foreign capital flows, seeking to limit speculative investment and favor more stable and committed capital investments.

Answer 2

A Multinational Company will bound the effect of upcoming disasters within the international economic system on the flexibility of the firm to lift investment to recompense its short-run expenses and fund long run funds in the subsequent methods:

• Confirm that the corporate is cost-effective and collapse resistant by differentiating into artifact parts that are pledge diurnal to the most line of the corporation. Maybe, throughout the world money crisis, the upper education phase did well as variety of dismissed wished to upgrading their abilities or re-skill themselves. College conscription enlarged throughout the world money crisis.
• Expand geologically in terms of markets, provide foundations, plant positions and then on, so just in case sure economies are consuming inactive development, others will compose. Throughout the world money crisis, the expansion in China and Asian country failed to get exaggerated.
• Use obligation providentially so the corporate isn't over leveraged.
• Have a vigorous record and make sure that satisfactory money assets are there with the corporate to require care of adverse times.
• Be complex to tuned in to international economic circumstances and appearance for early cautionary marks of an at hand crisis.