Prof. Kati Suominen
UCLA Anderson School of Management
International Business Economics
Winter 2014
Management 205A: International Business Economics
Preliminary Syllabus
Prof. Kati Suominen
Mondays 4:10-7:00PM In B117
Contact Information
Office: C520
Email: kati.suominen@anderson.ucla.edu
Office Hours: By appointment
Teaching assistant: Youngjin Lee
Email: youngjin.song.2015@anderson.ucla.edu
COURSE DESCRIPTION
The opportunities and risks in the 21st century global economy are a key
consideration for policy and business leaders around the world. Nations are
today more dependent on each other for trade, investment, and wealth-creation
than ever before. They are also unprecedentedly vulnerable to crises and policy
barriers elsewhere in the global economy.
This applied course is about the drivers and effects of globalization, and about
doing business in the globalized world economy. It introduces the main concepts
in international economics, and illustrates them with real-world data, applications,
and research.
The course will also engage as guest speakers policy and business leaders who
are interpreting and shaping the global economic environment.
We have three goals: (1) to become conversant on globalization, especially the
drivers and effects of international trade and investment flows; (2) analyze and
solve thorny cross-border economic policy challenges; and (3) understand how
and why companies internationalize, and develop an international market entry or
expansion strategy for a company of your choice.
We will move swiftly from theories of trade and globalization to current hot topics
and problems in the global economy, and to doing global business.
Managerial Economics (405) or an equivalent economics class is a prerequisite
for 205A.
1
Prof. Kati Suominen
UCLA Anderson School of Management
International Business Economics
Winter 2014
ORGANIZATION
Readings:

Textbook. International Economics, 6th Edition by James Gerber (Prentice
Hall 2014).

Articles. The final syllabus distributed in class will have a series of
accessible articles that will give you an “executive brief” overview on key
topics we cover, such as free trade agreements, currency manipulation,
and U.S. trade policymaking. These are for you, as global executives, to
get a feel for a specific issue within 15-30 minutes.

You are encouraged to read the Financial Times (daily), the Wall Street
Journal (daily), and The Economist (weekly).
Website: Notes, slides and assignments will be posted on the class web page.
Requirements:

Quiz: There will be 1 in-class closed-book quiz (about 30 minutes) in class
5. The problems are mostly qualitative in nature and designed to check
your understanding of the main themes in the class.

Team assignments: there will be 2 team assignments/presentations, with
teams of 4-5 each. Each assignment involves a short in-class presentation
and 2-3-page memo.
o Policy advisory project. In the first assignment, you will be
policymakers (such as Secretaries of Commerce) solving an
international economic problem or negotiation. Make these very
specific problems, such as “how should U.S. and Europe regulate
e-commerce in the Transatlantic Trade and Investment Partnership
Agreement?” The policy presentation will be 5 minutes and take
place in class 6.
Please deliver a brief note on who is on your team and what is the
policy problem you plan to tackle by class 4. In the presentation
and memo: (1) explain the problem and why it matters (1-2 minutes
½ page), and (2) develop 3 policy options to solve it, and
recommend one of the three options as the top one (3-4 minutes /
1-2 pages).
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Prof. Kati Suominen
UCLA Anderson School of Management
International Business Economics
Winter 2014
o Business consulting project. In the second assignment, you will be
the management team of a company, presenting recommendations to
your Board of Directors (i.e., the rest of the class) on a global entry or
expansion strategy. Your selected company can be a multinational or a
start-up, and be based anywhere in the world. If your company sells
only in the U.S. market, then define its global entry strategy. If your
company currently exports overseas or is a major multinational, then
define its next stage of globalization. The presentation will be 10
minutes and take place when the final for the class is scheduled.
Please deliver a note on your team and the company you want to focus
on by class 8. In the presentation and memo, explain: (1) the rationale
for international expansion for the company; (2) selection of the optimal
market(s) for the company; (3) the optimal entry / expansion strategy
(direct exporting, indirect exporting, licensing, strategic partnership,
M&A, FDI, etc.); and (4) opportunities to draw on government
guarantees and financing for the globalization strategy.
In each area, consider and discuss opportunities and risks, and ways
to mitigate the risks. For example, if your company is U.S.-based,
consider such opportunities as free trade agreements between the
United States and the overseas market(s), and such risks as anticompetitive practices or intellectual property violations in the overseas
market.
Grades:
Your grade for the course will be based on your performance on all of the
requirements, weighted as follows:
In-class quiz
Class participation
Team policy memo
Team business strategy memo
30%
20%
25%
25%
Attendance Policy:

Attendance is required at all sessions. You are entitled to one unexcused
absence during the quarter. A second absence requires an explanation.
Every additional absence may lower your final grade, unless strong
justification is provided.

Class participation: Everyone is expected to participate actively in class
discussions and engage our guest speakers, as well.
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Prof. Kati Suominen
UCLA Anderson School of Management
International Business Economics
Winter 2014
Review Sessions:
The Teaching Assistant, Youngjin Song, will conduct review sessions as needed.
Let us know if you need help and/or want to learn more.
Instructor Evaluation:
Your feedback is very valuable. After the fifth week, your views about the course
will be formally solicited. There will be a final evaluation, as well. Please contact
me at any time to discuss the course and offer suggestions for improvements.
Indicative Schedule [final one distributed in class]
Class
Date
Topics
Speaker
Assignment
due
Overview of globalization
1
January
6
Explaining bilateral trade: Gravity model
None
None
None
None
Drivers of trade: Ricardian model
Gerber: Chapters 1 and 3
Drivers of trade: Heckscher-Ohlin,
Increasing Returns to Scale models
2
January
13
Impacts of trade liberalization: who
wins, and are there losers?
Politics of protectionism
Gerber: Chapters 4, 6
New trade theory
3
January
17
Drivers of FDI
TBD
Emerging hot topics in trade and
investment
Gerber: Chapter 5
4
None
Prof. Kati Suominen
UCLA Anderson School of Management
Class
Date
International Business Economics
Winter 2014
Topics
Speaker
Assignment due
Making of U.S. trade policy,
4
January 27
Modes of trade integration:
GATT, WTO and preferential
trade agreements
TBD
Team policy project:
tell your topic
TBD
Quiz
TBD
Policy presentations
In-class trade negotiation
competition
Gerber: Chapters 13, 2
5
February 3
TPP amid currency wars, QE2
wars, export wars? Balance of
payments, exchange rates,
trade and financial imbalances,
and future of business in Asia
Gerber: Chapters 9-10
6
February
10
Deep integration gone awry?
Common markets, optimum
currency areas, and future of
doing business in Europe
Gerber: Chapter 14
5
Prof. Kati Suominen
UCLA Anderson School of Management
Class
Date
7
February
14
8
February 24
International Business Economics
Winter 2014
Topics
Speaker
Assignment due
Trade and migration
TBD
Building a global business: how
do companies internationalize?
What kinds of companies
internationalize and why?
TBD
Team business
strategy: tell your
topic
TBD
None
Explore export.gov
9
March 3
Building a global business:
leveraging private and public
trade finance and insurance
instruments
Gerber: Chapter 8
Final presentations
10
March 10
Thinking ahead: Megatrends
shaping international trade and
production
6
Business strategy
presentations