ITF Course Odfutline 2015 (FT)

Post-Graduate Diploma in Business Management

Syllabus

INTERNATIONAL TRADE AND FINANCE

Credit 3

Course owner

Dr Ratna Vadra

[email protected]

Course Focus

Whatever be the pros and cons of globalization, it is the order of the day. Keeping that reality in mind, this course is designed to equip the students to understand trends in international trade, investment and finance in global context with special focus on India. Many IMT pass outs will engage directly or indirectly in commerce and finance across national borders. Increasingly, economic events abroad shape the opportunities and constraints faced by managers in the majority of industries across the globe. This course focuses on these issues.

Course Objectives

This course is about the trade and finance of the global economy. The purpose is to delve deep into the question about how firms prosper in international environment with use of knowledge regarding international trade and finance. Understanding international trade and finance in the days of fully regulated Indian economy was considered of secondary importance. It is now, for managers of all levels, simply a necessity. Doing business across borders is not the same as doing it at home. Rather, it entails a whole new set of managerial challenges: understanding basic economic theories of international trade, measuring the impact of government rules and regulations on international trade and investment, reassessing competitive advantage, evaluating the role of international financial institutions, considering the impact of currency fluctuations and trading regimes and understanding the complication of interlinked global financial market. The purpose of ITF course is to build a framework of analysis that enables managers to understand the challenges of international trade and finance and to capitalize on the opportunities they represent.

Pedagogy:

The pedagogy will be a combination of class lectures (theory and discussion of real life issues), interaction, case studies, caselet discussion and projects/assignments. The theories will be discussed with graphical and mathematical analysis and will be supplemented by numerical examples. Students are also expected to read and identify the problems in the cases and caselets, which will be analysed in the classes with participatory discussion.

Course requirement

1. Students must read the cases and the caselets. If they are negligent in this task, they may subject themselves to penal action.

mailto:[email protected]

2. Reading newspaper and keeping oneself abreast of latest happening in the Indian global economy is a must for gaining mastery over understanding global economic issues. If you face any difficulty in understanding economic concepts while studying business newspapers and listening to business news channels, get it explained by the teacher at his/ her appropriate time.

3. Class participation is very much useful for better understanding of the concept. This will be appreciated and rewarded if you add value to the class through your questions, statement, and comments.

4. Any assignments/projects assigned to you either individually or in group should be completed within the stipulated time.

Evaluation

Components of evaluation are very crucial pertaining to the overall learning of the course by a student. Keeping in mind students’ heterogeneous background and strategies specified above, the following components of evaluation have been designed to assess their subject knowledge and performance in the course.

Components of Evaluation Date Weightage of Marks (in percentage)

Class Participation/Assignment

To be monitored for all sessions/ to be intimated

by course faculty10

Quiz(AOL assessment)Please refer to Academic

Calendar10

Projects write-up Presentation and

Submission (in group)19th and 20th Session

30 [Presentation 10 Report Evaluation 20)

End-Term TestPlease refer to Academic

Calendar50

Total 100N.B.: If you miss any component of evaluation, you will get ‘zero’ since repeat of test will not be

entertained

Assessment methods

Goal 2Sub goal 1.2

Sub goal 2.2

Sub goal 3.1

GROUP

Major projects(20)

Project Presentation(10)

INDIVIDUAL

Quizzes(10)

Class participation/Class Test (10)

End term (50)

* Aol mapping will be done through quiz of 10 marks after 10 lectures.

The marks distribution among different components of evaluation is subject to change at the discretion of the faculty

Project

The group project will be one of the most important learning tools of the course. This is a highly interactive real life project, which requires a high degree of analysis and tangible recommendations. The faculty will assign the project topic to each group.

Project Proposal Format

Your proposal should include following:

Introduction/Background of the project

Rationale for taking the project

Objective of the study

Scope of the study

Methodology

Expected outcome

Project schedule

Final Report Format

The final report has to be prepared and submitted in the format encompassing the areas mentioned here under the heading of “Contents”.

Executive Summary

Acknowledgements

List of Abbreviations

List of Tables

List of Figures

Main body

1. Introduction/Background of the study

2. Objective of the study

3. Scope of the study

4. Methodology

5. Project findings

6. Recommendations

7. References8. Appendix

Group Project Report Presentation

The presentation should cover both the analysis, policy conclusions, if any and overall findings.

Each presentation will be of 15/20 minutes followed by 5 minutes for open discussion, subject to change at the discretion of the faculty.

Textbook and reference books

1. Hill – Global Business Today, 3rd Edition,Tata Mcgraw Hill.( Text book)2. Caves and Jones; World trade & payments, 10th Edition, Pearson.3. Salvatore D.: International Economics, 9th Edition, Wiley.4. Levy M.D.: International Finance, 5th Edition, Routledge. 5. T. J. O’Brien - International Finance, 2nd Edition, Oxford University Press.6. Justin Paul & Aserkar A: Export Import Management, 1st Edition,Oxford University Press.7. Barua and Stern(ed.) – The WTO and India, : Issues and Negotiating Strategies, 1st Edition,Orient

Blakswan Private Ltd.8. International Business, Rakesh Mohan Joshi, Chapter13, pp.546-565, Oxford Publication, 2009.9. Cases from Harvard Business Review and other sources10. Web sites of IMF, WTO, World Bank and Ministry of Commerce, Government of India.

Module -1

Introduction

Lecture 1and 2

Introduction, International trade – Distinction from national trade, Rationale for studying international trade and finance, International trade and finance in the era of globalization

Sessions 1 & 2 (150 minutes)

20 minutes 20 minutes 10 minutes 30 minutes 20 minutes 20 minutes 30 minutes

International trade – Distinction from national trade

Rationale for studying international trade and finance

Current trends in international trade

Defining globalization International trade and finance in the era of globalization

Globalization of markets

Globalization of products

Pro and cons of globalization

Readings:

International Economics, Salvatore D, Chapter 1, 9th Edition, Wiley.

International Economics: Theory and policy, Paul .R. Krugman, Chapter 1, pp.1-9, Pearson

Global business Today Charles, Hill, Sixth edition, Chapter 1, pp.5-35, Tata, Mc Graw Hill

MODULE 2 : Theories of international trade

Lecture 3 amd 4

Classical Theories and neo classical Trade in the context of the countries : Economic theories of international trade – Mercantilism, Absolute advantage theory of Adam Smith, Comparative advantage theory of David Ricardo, Heckscher Ohlin theory of pattern of international trade. Neo classical theories of international trade – trade between similar nations, intra industry trade (rudimentary ideas.)

Sessions 3& 4 (150 minutes)

20 minutes 20 minutes 10 minutes 30 minutes 20 minutes 40 minutes 10 minutes

Why study trade theories?

Mercantilism Absolute advantage theory of Adam Smith

Heckscher Ohlin theory of pattern of international trade.

Comparative advantage theory of David Ricardo

Neo classical theories of international trade

Relevance of trade theories?

Readings:

Global business Today Charles, Hill, Sixth edition, Chapter 5, pp.180-192, Tata, Mc Graw Hill.


Lecture 5

Managerial theories of international trade – Porter’s competitive advantage theory, Product life cycle theory.

Sessions 5 (75 minutes)

15 minutes 20 minutes 10 minutes 30 minutes

Managerial theories of international trade: Porter, product life cyucle

Porter’s competitive advantage theory

Product life cycle theory.

Caselet

Module 3

Government and international trade

Lecture 6

Trade restrictions – tariff, quota and subsidy. Debate over optimality of free trade – concept of small and large country. Effective rate of protection.

Session 6(75 minutes)


Trade restrictions – tariff, quota and subsidy

Debate over optimality of

free trade

concept of small and large country

Effective rate of protection.

Readings:


Lecture 7

International institutions – IMF, World Bank

Session 7( 75minutes)

15 minutes 30 minutes 30 minutes

Impotance of International institutions

IMF World bank

Readings:

Global business Today, Charles, Hill, Sixth edition, Chapter 10, pp.339-436, Tata, Mc Graw Hill.

Lecture 8

WTO, Dispute management by WTO.

Session 8( 75minutes)


GATT why GATT was

WTO,Functions of WTO,

Major issues in WTO:

India and

Readings:



abolished? Dispute settlement in

WTO

Dumping sunsidies

WTO

Website : www.wto.org

Lecture 9

Regionalism and idea of customs union.

Lecture 9(75minutes)


Regional Economic Intergation importance, benfits of REIs

Types of trade blocs

Continued continued

Readings:


Module 3

Trade in the context of firm.

Lecture 10

Emergence of multinational corporations. MNC as intermediary.

Lecture 10 (75 minutes)


Emergence of multinational corporations

MNC as intermediary.

Case study :Multinational as Global Intermediaries

Discussion

Case Study : Multinational as Global Intermediaries,2003, Tarun Khanna and Krishna Pepepu (HBR)

Readings:

International Business, Rakesh Mohan Joshi, Chapter13, pp.546-565, Oxford Publication, 2009.

Lecture 11

Foreign investment, Eclectic theory of foreign investment.

Lecture 11(75minutes)


FDI and FIIs

Theories of FDI

Advantages and disadvantages of FDI, current trends

Readings:


Lecture 12

Choice among export, licensing, franchising, joint venture, wholly owned subsidiary

Case Study: Wal-Mart in Argentina (Global business Today, Charles, Hill, Sixth edition)

Lecture 12


Types of Mode of Entry

Export, licensing ,

franchsing , joint venture

Wholly owned Subsidiary

Case Study: Wal-Mart in Argentina

Readings:


Module – 4

International finance

Lecture 13

Introduction to foreign exchange. Risk in foreign exchange. Spot and forward exchange rate. Forward, future, options and currency swap.

Lecture 13


Introduction to foreign exchange

Risk in foreign exchange. Spot and forward exchange rate. Forward, future, options and currency swap.

Numericals

Readings:

Global business Today, Charles,Hill, Sixth edition, Chapter 9, pp.306-314, Tata, Mc Graw Hill.

Lecture 14

Foreign exchange and interest rate. Covered and uncovered interest parity. Debt and foreign exchange exposure.

Foreign exchange and interest rate.


Foreign exchange and interest rate.

Foreign exchange

and interest rate.

Debt and foreign exchange exposure.

Numericals

Readings:


Lecture 15 and 16 :Crisis in international financial market. East Asian Crisis of late 1990s, Global melt down, 2008 and Eurocrisis – a broad overview.

Sessions 1 5 & 16 (150 minutes)

20 minutes 30 minutes 30 minutes 30 minutes 20 minutes

Crisis in international financial market

East Asian Crisis of late 1990s

Global melt down,

Eurocrisis – Impact on economies

Readings:


Module -5

Focus on India

Lecture 17: Basic framework and institutions of export import business in India.

35 minutes 30minutes 10 minutes

Export import in India : Current trends

Basic framework and institutions of export import business in India.

EXIM Bank

Discussion

Readings :

Website of Ministry of Commerce, Government of India.. www.eximbank.com

Lecture 18, 19, 20: Project presentations

ITF Course Odfutline 2015 (FT)

Documents

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