THE EFFECT OF GLOBAL FINANCIAL MARKETS ON BUSINESSES

Abstract

This paper reviews the theory and evidence on the effects of globalization of financial transactions on businesses. Two important benefits are identified. First, globalization reduces a company’s cost of capital. Second, globalization improves corporate governance so that manager actions are better aligned with shareholder interests. This improvement in corporate governance further contributes to a reduction in a firm’s cost of capital.

Citation

Bhattacharya, U. and Bonser-Neal, C. (2003), "THE EFFECT OF GLOBAL FINANCIAL MARKETS ON BUSINESSES", Rugman, A.M. (Ed.) Leadership in International Business Education and Research (Research in Global Strategic Management, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 163-174. https://doi.org/10.1016/S1064-4857(03)08011-2