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International Financing Decision: A Managerial Perspective

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  • Cristian PAUN

    (The Bucharest Academy of Economic Studies, Romania)

Abstract

International financial decision is not a simple one and it is mainly characteristic to multinational companies or to companies located in countries with a reduced saving rate that is not sufficient to cover all internal financing needs (is the case of emerging markets like Romania is). The financial managers of Romanian companies need to have tools to decide if they will use a credit in lei from local banks or will try to obtain a credit from abroad in a foreign currency (in Euro, USD etc.). The required assumption in this case is that capital account between Romania and other countries is totally free. This decision is not a simple one and it should be based on theoretical background. The financing decision depends upon two main criteria: cost and risks assumed by the company. This paper will discuss the solution in this case to compare different international financing opportunities that are expressed in different currencies from the perspective of a debtor (company).

Suggested Citation

  • Cristian PAUN, 2012. "International Financing Decision: A Managerial Perspective," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 13(3), pages 411-425, July.
    • Handle: RePEc:rom:rmcimn:v:13:y:2012:i:3:p:411-425
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    File URL: https://www.rmci.ase.ro/no13vol3/06.pdf
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    References listed on IDEAS

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    Cited by:

    1. Paun Cristian, 2017. "Monetary policy as a source of risk in international business financings and investments," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 11(1), pages 660-668, July.

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    More about this item

    Keywords

    international cost of capital; international capital budgeting; international credit; international financing decision.;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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