Corporate Investment Decisions

Chapter 9

International Capital Budgeting

Introduction

Modern business operates in a global marketplace and companies that limit their operations solely to domestic markets are likely to encounter increasing competition not only from other domestic companies but also from transnational companies. This internationalization of business has largely been brought about by fundamental political, technological, regulatory, and economic changes during the 1980s and 1990s that include the following:

• Massive deregulation in telecommunications, financial services, and airline sectors
• Integration of international capital and financial markets
• Privatizations designed to reduce the public sector
• Rapid advances in information technology including, more recently, ...