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Payments Netting in International Cash Management

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  • Alan C Shapiro

    (University of Southern California)

Abstract

Global production rationalization typically leads to a heavy volume of intercompany fund flows. By transferring only a netted amount of these payments, significant savings can be realized in the form of reduced foreign exchange spreads, float, and other transaction costs. However, if this netting is done by paper and pencil, opportunities to reduce transfer costs may be missed, especially where there is a complex pattern of cross-border transactions. The purpose of the paper is to show how mathematical programming can be used to design a netting system capable of minimizing the total costs involved in setting interaffiliate accounts.© 1978 JIBS. Journal of International Business Studies (1978) 9, 51–58

Suggested Citation

  • Alan C Shapiro, 1978. "Payments Netting in International Cash Management," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 9(2), pages 51-58, June.
    • Handle: RePEc:pal:jintbs:v:9:y:1978:i:2:p:51-58
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    Cited by:

    1. Hinz, Holger, 1987. "A transshipment-type model for the optimal allocation of foreign currencies in multinational corporations," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 186a, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    2. Hinz, Holger, 1990. "Some advances in supporting international financial management decisions," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 248, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    3. Shane Barratt & Stephen Boyd, 2020. "Multi-Period Liability Clearing via Convex Optimal Control," Papers 2005.09066, arXiv.org.

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