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New Parity concepts to address Globalised economy - Essay Example
The complex, intra continental and diversified global business scenario has necessitated more comprehensive approach in international business and accounting. The trade between countries has to address a lot of issues such as exchange rates and parity. Investment and products are flowing across national boarders and corporates are expanding their business to all over the world…
Financial institutions, pension funds and institutional investors are reaching out the developing and most prospective markets such as China, India and other Asian markets with lot of investments. In this scenario, there has been a need for proper management of rate fluctuation, risk and exchange rate, which allows the estimation of investment yields and global risk premiums. The important issue is hedging of specific international risks through currency overlay strategies, derivatives and credit risk management models.
In this highly globalised business scenario, issues in international business such as trade disputes, exchange rates, inflation and currency crises have necessitated more focus on international financial management. Some new approaches for this are characterized by high analytical rigor, substantial attention to empirical evidence, and integration of functional areas (including finance, economics, strategy, and accounting/taxation). (Reid W. Click, Joshua D. Coval, The Theory and Practice of International Financial Management, Prentice Hall; 1st edition)
Global flows of funds have caused a substantial change in the international financial markets and foreign currency markets. ...