International Financial Management
Siegen, November 22-29, 2013
J. Markham Collins, PhD
All the readings except for those in the primary textbook, Eun, Cheol S., Resnick, Bruce G. (2009).
International Financial Management, 5th Ed. McGraw-Hill (or Eun, Cheol S., Resnick, Bruce G. [2012].
International Financial Management, 6th Ed. McGraw-Hill,) can be found at this site:
http://www.box.com/shared/e46u22z8ud
Will open for students of the Siegen 2013 course by October 24.
You can buy a copy of the 5th edition of the Eun and Resnick textbook from Amazon for about € 8.00 plus
shipping.
CASES:
Harvard Business Cases can be purchased through Harvard Business Online:
https://cb.hbsp.harvard.edu/cbmp/access/22756292
Just go to that link and purchase the course pack. It costs about € 6.00
I. Introduction to Trade, Global Investment, the International Monetary
System
Book Chapters:
• Appleyard et al. (2010) – Chapter 20, pp. 476-506
• Eun & Resnick (2009) – Chapter 2, pp. 25-59 & Chapter 16.
• Or Eun & Resnick (2012) – Chapter 2, pp. 29-63 & Chapter 16, pp 407-434.
Power Point lessons: Part 1 and 2.
II. Exchange Rates and Parity Conditions
Book Chapters:
• Appleyard, Chapter 20, pp. 476-506 & Chapter 28, pp. 713-738
• Shapiro (2010). Chapter 2, pp. 57-98
• Eun & Resnick (2009) – Chapter 5, pp. 108-133 & Chapter 6, pp. 134-164
• Or Eun & Resnick (2012) – Chapter 5, pp. 112-138 & Chapter 6, pp. 139-171
Power Point lessons: Part 3 through 5.
Readings:
• Mundell (1961)
• McKinnon (1963)
• Kenen (1966)
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International Financial Management | The University of Tulsa
III. The Optimal Currency Area and the Euro
Book Chapters:
•
•
Shapiro, Chapter 3, pp. 99-134
Appleyard, Chapter 29, pp. 739-774
Readings:
•
•
•
•
•
•
Mundell (1998)
Mundell (1999)
Vasiliauskaitė, et al. (2007)
Kotil et al. (2009)
Zhao and Kim (2009)
Mundell (2002)
Power Point Lessons: Part 6 and 7.
IV. Managing Translation and Transaction Currency Exposure
Book Chapters:
•
•
•
Shapiro, Chapter 10, pp. 354-402
Eun & Resnick (2009), Chapter 8, pp. 192-220 & Chapter 10, pp. 242-261
Or Eun & Resnick (2009), Chapter 8, pp. 197-226 & Chapter 10, pp. 248-265
Power Point Lessons: Part 8
Readings:
•
Goldberg, S., & Drogt, E. (2008)
V. Economic Exposure
Book Chapters:
•
•
•
Shapiro, Chapter 11, pp.403-449
Eun & Resnick (2009), Chapter 9, pp. 221-241
Eun & Resnick (2012), Chapter 9, pp. 227-247
Readings:
•
Collins (2010)
Power Point Lessons: Part 9
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International Financial Management | The University of Tulsa
Case Studies:
•
•
•
Lufthansa: To Hedge or Not to Hedge
McDonalds Corporation’s UK Pound Exposure
Porsche Exposed
Listed References
Appleyard, D., Field, A., Cobb, S. (2009). International Economics. McGraw-Hill
Choi, J., & Jiang, C. (2009). Does multinationality matter? Implications of operational hedging for the
exchange risk exposure. Journal of Banking & Finance, 33(11).
Collins, J. Markham (2010). Determinants of Economic Exchange Rate Exposure. Working Paper, 2010.
Eun, Cheol S., Resnick, Bruce G. (2009). International Financial Management. McGraw-Hill
Goldberg, S., & Drogt, E. (2008). Managing Foreign Exchange Risk. Journal of Corporate Accounting &
Finance (Wiley), 19(2), 49-57.
Kenen, Peter B. (1966). The Theory of Optimum Currency Area: An Eclectic View. In Monetary
Problems of the International Economy, Mundell, Robert A. and Swoboda, Alexander K. Eds. University
of Chicago Press, 1969.
Kotil, Erdogan; Konur, Fatih; Çakici, Kemal (2009). Assessment of the Euro Zone According to the
Criteria of the Theory of Optimum Currency Areas. International Research Journal of Finance &
Economics, Issue 27, p29-39, 11p
McKinnon, Ronald I (1963). Optimum Currency Areas. American Economic Review, Vol. 53 Issue 4,
p717, 9p
Mundell, Robert A. (1961). A Theory of Optimum Currency Areas. American Economic Review, Vol. 51
Issue 4, p657, 9p
Mundell, Robert A. (1998). What the Euro Means for the Dollar and the International Monetary System.
Atlantic Economic Journal, Sep98, Vol. 26 Issue 3, p227, 11p
Mundell, Robert A. (1999). The Euro: How Important? CATO Journal, Vol. 18 Issue 3, p441, 4p
Mundell, Robert A. (2002). Does Asia Need a Common Currency Market? Pacific Economic Review,
Vol. 7 Issue 1, p3, 10p
Shapiro, Alan C. (2010). Multinational Financial Management. John Wiley & Sons, Inc.
Vasiliauskaitė, A., Vitkauskas, M. (2007). The Attainability Analysis to Complete requirements of
Optimum Currency Area with EU. Economics & Management, 2007, p261-268, 8p
Quah, Chee-Heong (2009). The Feasability of East Asian Monetary Union as an Optimum Currency
Area. International Journal of Asia-Pacific Studies, Vol. 5 Issue 2, p65-90, 26p
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International Financial Management | The University of Tulsa
Zhao, X., Kim, Y. (2009). Is the CFA Franc Zone an Optimum Currency Area? World Development, Vol.
37 Issue 12, p1877-1886, 10p
Recommended Readings
Cesarano, F. (2006). The Origins of the Theory of Optimum Currency Areas. History of Political
Economy, Winter2006, Vol. 38 Issue 4, p711-731, 21p
Dellas, Harris; Tavlas, George S. (2009). An optimum-currency-area odyssey. Journal of International
Money & Finance, Vol. 28 Issue 7, p1117-1137, 21p
Frankel, Jeffrey A.; Rose, Andrew K. (1998). The Endogeneity of the Optimum Currency Area Criteria,
Economic Journal, Vol. 108 Issue 449, p1009-1025, 17p
Frankel, Jeffrey; Rose, Andrew (2002). An Estimate of the Effect of Common Currencies on Trade and
Income, Quarterly Journal of Economics, Vol. 117 Issue 2, p437-466, 30p
Hutson, Elaine; O’Driscoll, Anthony (2010). Firm-level exchange rate exposure in the Eurozone,
International Business Review, Vol. 19 Issue 5, p468-478, 11p
Kenen, Peter B. (1997). Common currencies versus currency areas. American Economic Review, Vol. 87
Issue 2, p211, 3p
Kenen, Peter B. (2010). There Was No Analytical Alternative to the Theory of Optimum Currency Areas.
Econ Journal Watch, Vol. 7 Issue 1, p73-75, 3p
Kenen, Peter B. (2003). Making the Case for The Euro. International Economy, Vol. 17 Issue 1, p51, 4p
Makar, Stephen D.; Huffman, Stephen P. (2008). UK Multinationals' Effective Use of Financial
Currency-Hedge Techniques: Estimating and Explaining Foreign Exchange Exposure Using Bilateral
Exchange Rates, Journal of International Financial Management & Accounting, Vol. 19 Issue 3, p219235, 17p
McKinnon, Ronald I. (1994). A Common Monetary Standard or a Common Currency for Europe? Fiscal
lessons from the United States, McKinnon, Ronald I. Scottish Journal of Political Economy, Vol. 41 Issue
4, p337, 21p
McKinnon, R. (2002). Optimum Currency Areas and the European Experience, Economics of Transition,
Vol. 10 Issue 2, p343-364, 22p
McKinnon, Ronald I. (2002). Money and Finance on the Periphery of the International Dollar Standard,
International Journal of Finance & Economics, Vol. 7 Issue 2, p87-96, 10p
McKinnon, Ronald I. (2004). Optimum Currency Areas and Key Currencies: Mundell I versus Mundell
II, Journal of Common Market Studies, Vol. 42 Issue 4, p689-715, 27p
Mishra, R. K., Sharma, C. (2010). Real Exchange Rate Behavior and Optimum Currency Area in East
Asia: Evidence from Generalized Purchasing Power Parity, International Review of Financial Analysis,
Vol. 19 Issue 3, p205-213, 9p
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International Financial Management | The University of Tulsa
Mundell, Robert A. (1960). The Monetary Dynamics of International Adjustment under Fixed and
Flexible Exchange rates, Quarterly Journal of Economics, Vol. 74 Issue 2, p227-257, 31p
Mundell, Robert A. (1973). Uncommon Arguments for Common Currencies, In H.G. Johnson and A.K.
Swoboda, eds., The Economics of Common Currencies (115-132). Harvard University Press, Cambridge.
Mundell, Robert A. (2000). Currency Areas, Volatility and Intervention. Journal of Policy Modeling, Vol.
22 Issue 3, p281, 19p
Ozer, I., Ozkan, I., Aktan, Okan H. (2007). Optimum Currency Areas Theory: An Empirical Application
to Turkey, South East European Journal of Economics & Business; Issue 4, p75, 14p
Shapiro, A., & Rutenberg, D. (1976). Managing Exchange Risks in a Floating World, Financial
Management (1972), 5(2), 48-58.
Silvestre, João; Mendonça, António (2007). The Endogeneity of Optimum Currency Areas Criteria: Some
Evidence from the European Union and Portugal. International Advances in Economic Research, Vol. 13
Issue 1, p1-18, 18p
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International Financial Management | The University of Tulsa