A Study On MNCs' Financial Strategy

With China's implementation of"Going Out"strategy, more and more enterprises will operate globally or become multinational corporations (MNC). The MNCs are increasing rapidly worldwide. However, most studies about MNCs focus on the forming and development of MNC; on the other hand, studies on financial strategy are general and not specified to different kinds of companies. This paper will analyze the influence of MNC's external and internal operating environment on its financial strategy. A wheel model will be introduced to analyze external environment's influence on MNC's financial strategy. In this model, the influence will be addressed in four aspects, which are international capital strategy, national political risk, international taxation and foreign exchange risk. Another smaller wheel model will also be introduced to analyze internal environment's influence on MNC's financial strategy. In this model, the influence will be discussed in three aspects, which are capital structure, corporate governance structure and stake structure. In the conclusion part, these two wheels will be combined to show how the combination of and interaction between the external environment and internal environment can affect MNC's financial strategy, and how MNCs can use this combined wheel model as a analytical tool to make and implement financial strategy more effectively.