Life of Fidel Castro Essay

The Life of Fidel Castro Fidel Castro, is the well-known dictatorial leader of Cuba for nearly five decades. His leadership has been the focus of international controversy. How is it that a man of this privileged upbringing, became the leader of a socialist revolution in Cuba, brought the world to the brink of destruction, and ultimately became one of the most famous political leaders in the history of Latin America. He was born on a farm in Biran, Cuba near mayan on August 13, 1926. He received a Jesuit education while attending a boarding school in Havana by the name Colegio de Belen. When he finished high school, he attended the University of Havana. In 1950 he graduated from the university with adegree in law. â€Å"A man is not entirely the master of his own destiny. A man is also the child of circumstances, of difficulties, of struggle. Problems gradually sculpt him like a lathe sculpts a piece of metal. A man Is not born a revolutionary, I’d venture to say. † (Castro, and Ramonet 23) In 1952 Fidel Castro became a candidate for Congress for the Cuban People’s Party. He was a superb public speaker and soon built up a strong following amongst the young members of the party. The Cuban People’s Party was expected to win the election but during the campaign. General Fulgencio Batista, with the support of the armed forces, took control of the country. Castro came to the conclusion that revolution was the only way that the Cuban People’s Party would gain power. In 1953, Castro, with an armed group of 123 men and women, attacked the Moncada Army Barracks. The plan to overthrow Batista ended in disaster and although only eight were killed in the fighting, another eighty were murdered by the army after they were captured. Castro was lucky that the lieutenant who arrested him ignored orders to have him executed and instead delivered him to the nearest civilian prison. In 1959 Cuba becomes the first Communist state in the western hemisphere after Fidel Castro, a 32-year-old lawyer, leads his rebels, known as the 26 July army, to victory on the streets of Havana, overthrowing the regime of US-backed dictator Fulgencio Batista. Castro appoints Ernesto â€Å"Che† Guevara to his government. Attempting to spread the revolution in South America, Guevara is captured in a firefight in the jungle with Bolivian government troops and executed two days later. He had disappeared from the Cuban political scene in 1965 amid growing rumors that he had becomedisillusioned by Castro’s drift towards less radical politics. During 1979 Cuba supports the Soviet Union’s invasion of Afghanistan. Later, Cuba controversially sends military assistance to influence civil wars in Angola and Ethiopia. Anglo-Cuban relations almost reach breaking point after a Cuban diplomat fires a gun in a crowded London street in 1988. Havana claimed that its attack was being followed by CIA agents plotting to force him to defect. The Thatcher government condemned the behavior of the Cuban diplomat and added that a man was wounded – he was a member of the British security services and not the CIA. The US tightens its longstanding embargo on Cuba during 1992, extending restrictions on travel and trade with the Cuban Democracy Act. Fearing a collapse, Castro slowly begins to deregulate Cuba’s economy, moving to allow limited individual private enterprise A boat rescue of a Cuban child, Elian Gonzalez, sparks a diplomatic row with the US. The six-year-old boy was picked up off the Florida coast after he and his mother attempted to flee Cuba. After a protracted court battle, he was sent back to Cuba to live with his father, despite a high-profile campaign by wealthy US-based Cubans for him to remain. On July 31, 2006, Castro delegated his duties as President of the Council of state, President of the Council of Ministers, First Secretary of the Cuban Communist Party and the post of commander in chief of the armed forces to his brother Raul Castro. This transfer of duties was described at the time as temporary while Fidel recovered from surgery he underwent due to an acute intestinal crisis with sustained bleeding. Fidel Castro was too ill to attend the nationwide celebration of the 50th anniversary of the Granma boat landing on December 2, 2006, which also became his belated 80th birthday celebrations. Castro’s non-appearance fueled reports that he had terminal pancreatic cancer and was refusing treatment, but on December 17, 2006 Cuban officials stated that Castro had no terminal illness and would eventually return to his public duties. Castro, who has not appeared in public since undergoing stomach surgery, said he would not seek a new term as president or leader of Cuba’s armed forces. He has retired and given the power to his younger brother Raul. â€Å"Fidel has outlasted seven U. S. presidents and five Soviet leaders. He has been in power longer than any world figure except King Hussein of Jordan. † (Bourne 305)

Enron: Smartest Guy in the Room Essay

Enron: The Smartest Guys in the Room is a documentary that was produced in 2005 as a reflection of the 2003, bestselling book with the same name. The documentary was written by Bethany Mclean and Peter Elkind. The film, produced by Alex Gibney is an explicit demonstration of how reputable corporations can tumble down because of illicit financial management. The film is about the Enron Company, which experienced enormous financial drains because of the scandals elicited by its top managerial team. Two years after the inception of the company, two traders engage in betting activities on the lucrative oil markets. This eventually leads to suspicious profits for the company, a phenomenon that raises eyebrows on the financial stand of the company. It is also discovered that Enron’s Chief Executive Officer is redirecting the company’s finances to different accounts. In demonstrating the poor financial management of Kenneth Lay, he encourages the traders to keep on making money for the company, yet he understood clearly that betting is a risky activity that could cause the company a lot of its assets. Lay finally realizes his mistakes when he sacks the traders because of wasting the company’s reserves through gambling. Their actions virtually damaged the image of Enron. When the facts about what happened to the company are exposed, Lay argues that he had no knowledge of the illicit financial endeavors. Jeffrey Skilling is brought in as the new CEO and immediately imposes his own principles about handling profits and projects. Skilling adopts a management practice that engages the company in projects without examining whether the projects have the capacity to be successful or not. This is indeed, a trait that has the capacity to taunt the image of the company in respect to the management of its assets and resources. In essence, this portrays Enron as a profit making company, even if it is not making any profit. The film also highlights on Skilling’s theory of grading employees and firing those who do not perform well, on an annual basis. In order to fulfill his endeavors for the company, Skilling appoints Clifford Baxter and Lou Pai, who heads the Enron Energy Services. Pai is an irresponsible executive who squanders money belonging to shareholders by visiting entertainment joints. Eventually, Pai resigns having cost Enron a loss of $1 billion. After selling his stock, he purchases a ranch in Colorado and becomes one of the largest landowners in the state. Despite the declining performance of Enron in the global scale, the company initiates a public relations campaign that displays itself as profitable and solid. With the short term successes that the company gets, it tries to captivate stock market analysts. Executives raise their stock prices and introduce the broadband technologies in order to distribute movies on demand, but the projects do not meet their expectations. After a series of financial irregularities, Jim Chanos and Bethany McLean expose the financial misappropriation and irregularities in stoke value. In response to the allegations, Skilling argues that McLean is unethical in his assertions. It is also found out that Andrew Fastow, one of Enron’s executives has been defrauding Enron of millions of dollars. Indeed, this is a documentary about the fall of a big corporation because of financial misappropriation (Gibney, A. and McLean, 2005). II. Analysis In reference to the documentary, it is worth pointing out that the management of the company did not articulate its financial obligations in the most feasible way. Financial management is an integral aspect in the success of a company. A company’s management should ensure that proper procedures are followed in capitalizing on its assets in order to avoid loses in the future (Bhat, 2008 p. 65). The management team’s lapse in controlling its finances led to the downfall of the company. The image of the company was put at risk because of the selfish actions of the leadership. The company’s corporate image was not able to maintain its stability, bearing in mind that the media exposed the inappropriate handling of the company’s assets. Embezzlement of the finances led to the loss of confidence in the public eye. This is a clear indication that financial obligations are pertinent in influencing the performance of a company; since, financial endowment is a primary component of expanding the image of a business enterprise (Shoffner, Shelly & Cooke, 2011 p. 36). It is also worth noting that the management’s actions affected the performance of the employees. In a company, it is extremely pertinent to invest in feasible measures that will enhance human capital. A well established human capital is instrumental in providing a viable platform for proper financial management (Jones & Spender, 2011 p. 94). When the management started a program of rating and firing employees, this created a non-cohesive environment that did not give employees a chance to thrive. In this respect, employees could not fulfill their obligations in enhancing the capacity of the company. In addition, the stakeholders to the company lost confidence in the management team of the company because it did not deliver as it was expected of them. This affected the input of the stakeholders as well as the internal and external cohesion of the company. It is also critical to assert that the company faced financial implications resulting from management’s failure to conduct itself in a competent and professional way. The company’s markets share did not achieve its expectations; since, it could not maintain stability in the stock market. The values of its shares could not compete vehemently with other companies because the company had lost its market value. Moreover, the company incurred losses in regard to its assets record through engaging in illicit financial planning. This led to the company failing to meet its financial objectives; since, it was not in a position to control its costs. The failure of a company to control its costs leads to unaccountability and the risk of loses due to poor accounting systems (Lee, 2006 p. 201). Additionally, the company experienced a lapse in its financial accounting systems in an effort to hide the misappropriation of finances. Compromising the financial accounting systems resulted to slow growth in the development of feasible accounting procedures (Hampton, 2009 p. 6). Another financial consequence to the company was the inability to control debts. The company could not keep track of its debts because its financial records had been compromised by the incompetence of the management team. The lack of proper financial returns led to inconsistency in the company’s performance; hence, leading to an internal financial crisis. In this respect, it is viable to underscore that the financial inconsistency in a company is a contributing factor in its financial meltdown (Brigham, Gapenski & Ehrhardt, 2011p. 12). III. Commentary The actions of the management team were indeed detrimental in the financial breakthrough of the company. The company’s resources were put in jeopardy because of mishandling the assets in an unethical manner in respect to business standards. The employees of the company did not have a cohesive environment to capitalize on their potential. They could not handle the products and services of the company in a professional way because the management team did not provide the platform for enhancing the cost of goods. I believe the biblical worldview as Christ would view it for the church is that whatever you do in the dark will be exposed. The Bible states that God hates the very presence of evil and it will have no place in his kingdom. So the catastrophic effect that this company had on society was abomination to what God would want for his people. God wants us to suffer with him and the end result is that we will reign with him, however lying, cheating and stealing will not have a place in heaven. As part of the management team, I would have handled things differently. Firstly, it is significant to point out that I would not allow incompetent people to control the company’s finances. Only competent people would be allowed to handle the company’s financial obligations and management of the company’s assets. Secondly, it is essential to assert that I would invest immensely in the employees of the company. I would ensure that human capital is enhanced in order to improve the image of the company. It is widely acknowledged that an empowered human resource is vital in the success of a company; hence, I would seek to empower the activities of the employees. Moreover, as part of the management team, I would ensure that transparency is enhanced in corporate governance. The duties and responsibilities of every stakeholder would be defined in an amicable way, in order to avoid the confusion that emerges. This would play a dominant role in enhancing the profitability of the company, as well as improving the image of the company in a large scale. Indeed, it is critical for any business enterprise to adopt a viable mechanism of enhancing its corporate governance (Baker, 2008 p. 78). In my opinion, I believe what happened was as a result of managerial incompetency by the management team. Lack of inconsistencies in financial breakthrough by the company led to the meltdown in the company’s assets and costs control. In this respect, I believe that accounting laws and regulators can help in avoiding this scenario again. The accounting laws will play a dominant role in keeping track of a company’s financial assets and prevent it from incurring unnecessary loses. In addition, it is critical to highlight that such law and regulators will help immensely, in holding the management accountable. The management team of a company will be able to maintain high profile accountability in maintaining the value of the company. The market share of a company is able to attain reputable standards because of using the accounting laws. Additionally, accounting laws and regulators act as instrumental platforms in identifying challenges in a company, and making the necessary decisions in overcoming the challenges. The management team of a company is able to use business intelligence in developing a way forward in solving the challenges that a company faces in respect to financial management. In order to avoid the detrimental effects of financial mismanagement, companies can adopt viable ways of managing their operations. Transparency is a critical way of enhancing the gains of a company because its operations are open to scrutiny. In addition, it is important for companies to employ competent personnel to handle its operations, ranging from cost control to managing its experiences. It is pertinent for companies to develop policy frameworks that implement feasible financial obligations.

Alliances of Ww1 Essay

war. The alliances were one of the long-term effects of world war one. All alliances started secretly before world war one but what made it significant is when it was clear after Austria declared war on Serbia, Russia declared war on Germany and Austria and the domino effect started, which in the end led to world war one. However, all these alliances in world war one were intended for defense against the expanding Germany army. While, in world war two the alliances were not used for defense†¦ Militarism- The military grew in competing countries. The contest between Germany and Britain at sea between Germany, France, Russia Alliance System- where big countries stayed together incase of a war. The triple alliance and leaders of big alliances acted reckless towards others. Imperialism- Ruling over a country. European countries ruled smaller countries, and competed with each other. Colonies became known as Imperialism. France and Britain had many colonies in Africa and Asia. Germany†¦ involved. The war drew in all the world's great economic powers, which were assembled in two opposing alliances: the Allies and the Central Powers of Germany and Austria-Hungary. Although Italy had also been a member of the Triple Alliance alongside Germany and Austria-Hungary, it did not join the Central Powers, as Austria-Hungary had taken the offensive against the terms of the alliance. These alliances were both reorganized and expanded as more nations entered the war: Italy, Japan and the United States†¦ Events Leading to WW1 World War 1 was the start of changing times in the early 1900 's. This was a time for countries to draw a line in the sand and make a mark as to who would be the new world order. Archduke Franz Ferdinand was an heir to the country of Austria. Once Ferdinand became ruler, he proposed some policies that didn 't pass over well with the other leaders within Austria. One policy would aim at becoming 16 states rather than have Austria fade into the background of Hungary 's government†¦ by Gavril Principe, a Bosnian Serb citizen of Austria-Hungary and member of the Black Hand. The retaliation by Austria-Hungary against Serbia activated a series of alliances that set off a chain reaction of war declarations. Within a month, much of Europe was in a state of open warfare. The war was propagated by two major alliances. The Entente Powers initially consisted of France, the United Kingdom, Russia and their associated empires and dependencies. Numerous other states joined these allies†¦ IMPACTS OF WW1 ON AUSTRALIAN SOCIETY Almost a century has passed but Australia still identifies strongly with the Anzac ‘legend' that emerged during the First World War. Entering the war as a small outpost of the British Empire, no one would have anticipated the courage and tenacity displayed by the Australian troops or the extent to which their war efforts would become the foundation of our national identity. While it lacked large numbers of troops to contribute to the British war effort,†¦ World War 1 (WW1) World War One, the first of two wars which shook the very foundations of the earth. The war was as long as it was brutal, consisting of the world’s greatest powers vied against one another in a brutal, slow conflict. In this war there were the Central and Allied powers, which fought one another for both heroic and selfish reasons. All the while trying to maintain their land and nobilities from being threatened by the other side. The war had many various reasons for beginning,†¦ weapons.† â€Å" Alliances also contributed to the war because when they signed an alliance with another county they gave each other their help if they needed it. Then Austria-Hungary declared war on Russia. Germany declared war on France two days later; they went through Belgium, which was neutral. Great Britain declared war on Germany after France was attacked. Then Austria-Hungary declared war on England and WW1 began†(www.historyonthenet.com). â€Å"The countries that were involved in WW1 that were Central†¦ Impact of WW1 on Russia Social and economic: The war proved an economic disaster for Russia, the direct cost of war rose from 1,500 million roubles in 1914 to 14,500 million in 1918. And this was an expense of the rural or industrial workforce, thus production slumped and in any case in time of war the country needed to be producing more, not less to feed and supply its armies Military problems: Although the Russian government managed to mobilise around 15 million men between 14-17, mainly†¦ Although the alliance between the UK and the USA had been established for many centuries, especially in the shared cause in WW1, it wasn’t until 1944 that the term ‘special relationship’ was used to describe Anglo-American relations. Winston Churchill said in 1944 that â€Å"unless Britain and the United States are joined in a special relationship, another destructive war will come to pass† , this was the foundation of the term ‘special relationship’. After the American Declaration of Independence in†¦

What is the Communicative approach to Language Learning Outline the Essay

What is the Communicative approach to Language Learning Outline the learning theories on which it is based - Essay Example So, now learning English for any professional or a student has become mandatory to excel in the selected trade. There are a number of ways a language that is usually foreign to students is taught. Language expertise or even little knowledge to communicate properly or rather thoroughly express is the intension. It is well known that human psychologist say a topic or a subject is well remembered or understood when it is taught in an interactive format for that matter in a communicative approach. Students were previously taught with the aid of audio media such as cassettes which spell the language and some times even translate the grammar of the foreign language. They were known as audio lingual and grammar translation methods. These did not give learning an enough realistic feeling that is they could not teach real time usage that is appropriate social language, gestures, expressions and were not able to communicate in the culture of the language studied. Slowly a new approach to teach foreign language has mushroomed in 1970s and it was named communicative-style of teaching where usage of authentic language and classroom exchanges took place. Students here were made to communicate with fellow students and teachers with mock situations being created. Language interaction is explained asâ€Å"Language is interaction; it is interpersonal activity and has a clean relationship with the society. In this light , language study has to look at the use of language context, both its linguistic context(what is uttered before and after a given piece of discourse) and its social or situational, context (who is speaking, what their social roles are, why they have come together to speak).† (Berns, 1984) A teacher or an instructor would have already planned the schedule to follow and practice exercises. Here the focus is basically on implementing the procedures to learn the language rather than talking in it. The schedule scheduled needs to be practiced in pairs for the sake

Learning Theories Essay Example | Topics and Well Written Essays - 5000 words - 1

Learning Theories - Essay Example Learning Theories Learning involves various aspects, including motivation, environment, attitudes of learners, and other factors (Ryan, Cooper & Tauer, 2010). In order to promote learning, teachers should look into the different aspects that affect learning. As a teacher, I see to it that learners are well motivated, the environment is conducive for learning, students are relaxed and comfortable, and they receive enough time to rehearse and apply the concepts or skills learned. Putting all these considerations together, I would say that I combine three approaches to learning. These approaches include behaviorism, constructivism, and cognitivism. However, I lay more emphasis on behaviorism because it guides me in my classroom management. There cannot be any learning if a classroom is not managed. Classroom management is one aspect that a behaviorist teacher focuses on. Students have different personalities but when they come to school, they act in uniformity according to the policies and regulations set by the school and its teachers. Establishing classroom rules is thus the first step to a well-managed classroom. Teachers should make it a point to establish rules at the beginning of the year and have them posted. In particular, classroom rules may be memorized by students and recited as part of routines. Rules may be posted on the bulletin board to remind students of their responsibility. In terms of assignments, it is best to make contracts for parents or guardians to sign. There should be an assignment notebook where students will write all their assignments. The teacher signs the assignment page, whether it was completed or not, and students will ask their parents to countersign the page so as to monitor students’ effort in doing their assignments. Practicing routines is another beneficial aspect of the behaviorist classroom. Routines help to make students become organized individuals. Students who learn routines in school will learn to keep a routine at home and eventually, in their professional field. With routines, performance and processes will be perfected. As part of everyday routine, students should greet the teacher and their classmates, check attendance by counting off (each should be assigned a class number), recite classroom rules, and report current news. The re porting of current events should be done in turns, based on the class number. These routine activities are supposed to prepare students for the day ahead, and to condition them to behave the way they should in school. Setting the mood of students is a must in the behaviorist classroom. In every lesson, the teacher should always give students some idea on what to expect for the day. This gets the students in the mood for activities, games, etc. For example, if the teacher says, â€Å"Today, we will play a game.† The students will know how to behave or react, and they will respond accordingly to the situation. If some serious activities need to be accomplished, then the teacher could say, â€Å"

Essays Essay Example | Topics and Well Written Essays - 10000 words

Essays - Essay Example Based on studies prepared years before the new millennium, Flowers (2002) concluded that the use and abuse of drugs, among other substances, have been robustly related to juvenile delinquency and criminality. Conditions have not improved much since then. Bartol and Bartol (2008) reported that juveniles made up 17 % of arrests made in 2005. Mocan and Tekin (2005) established that the use of drugs wielded a profound influence on one’s predilection to commit crime. Indeed, from LSD to OxyContin to ecstasy, drugs have figured significantly as triggers to commit crime from the late 60s until the present time. Called by its own inventor, Albert Hoffman â€Å"my problem child†, lysergic acid diethylamide or LSD has itself spawned real-life problem children or juveniles since 1938 when it was first synthesized (Carey, 2008; Berger, 2005a). Psychedelic or psychoactive drugs, like LSD, are among the purported mind-altering drugs. Drugs classified as psychedelic or psychoactive consist of a concoction of chemicals not necessarily taken to improve health but known to have the effect of changing the user’s thoughts, reactions and perceptions of bodily sensations (Berger, 2005b; Drug-Free America, 2004). Mind altering substances in the same category as LSD are heroin or diamorphine, which is a powerful analgesic; cocaine, a highly abused narcotic anesthetic; and the psychoactive cannibus resin or oil from the hemp plant and its flower-bearing stem or tops known as marijuana (â€Å"Heroin†, 2005; Berger, 2005c; Jenkins, 2005). Other mind altering drugs include, but are not limited to OxyContin tablets, a licit narcotic drug used for pain management; dextroamphetamine, a drug which is fast gaining notoriety as a â€Å"recreational drug† but is medically prescribed for sleep disorders or attention deficit hyperactivity disorder; and methamphetamine, which is a stimulant and a â€Å"feel good† drug usually smoked, swallowed or injected and used illegally

Meat Industry in Kenya Research Paper Example | Topics and Well Written Essays - 1500 words

Meat Industry in Kenya - Research Paper Example The livestock marketing council found in Kenya is a private entity that plays the role of advocating for the rights of livestock traders and assists them in marketing of their products. The banks found in Kenya provide individuals and organizations with agricultural loans to boost their agricultural undertakings including livestock keeping and trading in livestock. The government of Kenya runs the management of the public body that has monopolized the meat processing sector in Kenya. This includes provision of financial support for this corporation. Most of the privately owned firms dealing with livestock and livestock products are privately run. The management of such firms supports them financially and ensure that they are run in the desired way (Ngugi 2001pp52-63). Social and cultural factors affecting the meat industry in Kenya Most of the societies living in Kenya place no restrictions to consumption of meat with the very insignificant exemption of the Indians living in this country. This therefore means that the meat industry sells most of its products to the Kenyan local community. Most of the Kenyan communities value red meat and incorporates its consumption in many of their cultural ceremonies including weddings, initiation and even burial ceremonies. This has a positive impact to the meat industry due to the large public meat consumption during the ceremonies. Kenyan communities are further divided into subcultures which hold a number of social gatherings to deliberate on issues affecting them. Most of these subcultures normally take the red meat as the main diet served during such gatherings. An infamous group that dotes on red meat when holding its social gatherings is the 'Mungiki'. Technological factors affecting meat... The paper describes the determinants of demand for meat in Kenya. The price at which meat is sold determines the demand for it. When the price of meat goes up, fewer individuals will be willing to buy it. They feel like buying the meat at a higher price takes most of the money at their disposal away. Locals prefer to buy foods that can be supplemented with meat like beans or lentils for the provision of proteins in the body. This idea is mostly influenced by an increase in the price of the meat, which makes them reluctant to buy the expensive meat and prefer cheap protein supplements. When meat substitutes cost less than the meat itself, the local demand for meat shifts to the ‘more affordable’ substitutes. The Kenyan locals for example prefer to take fish or animal organs like the intestines, kidney or liver which costs less than the meat itself. The income levels also determine meat consumption within the local Kenyan setting. With most of the households leading a poor life, meat is commonly viewed as a luxury for the rich. Hence, the humble households consume meat less while the rich ones consume meat very frequently. The above characterizes the consumption of meat within social, geographical or even cultural levels. Since meat costs much higher than most other sources of income, those people living in areas where income is high will buy more meat than those areas where income is low. Thus, the Kenyan suburbs records high meat intake, than the slums.

Why I feel Iam deserving of the Good Neighbor Pharmacy Scholarship Essay

Why I feel Iam deserving of the Good Neighbor Pharmacy Scholarship - Essay Example I have pursued this course with diligence and hard work with constant improvement on my personal and interpersonal skills. I believe that a career in pharmacy should be built on fundaments of uncompromised integrity, strong morals, profound interest, and most importantly strong leadership skills. I have acquired all these skills and attributes with a specific focus on being one of the best and renowned professionals in pharmacy. What set me apart from the rest is my ability to remain resilient, diligent, enthusiastic, and particular focused on leadership attributes in my personal and professional life. Although I am focused towards my career goals, I always find time to develop myself socially, culturally, spiritually, and physically. I believe in societal empowerment and therefore, owe my success to the society. I wish to share my professional and personal achievements with the community once I am through with the internship program. Therefore, Good Neighbor Pharmacy Scholarship will be a lifetime achievement and would be an investment in the most appropriate place. I guarantee that your kind consideration to offer me this rare but noble opportunity would be the most meaningful consideration. Besides academic pursuing academic achievements, I have been overwhelmingly involved in physical development and teamwork. This is a list of physical activities that I have been involved in for the last few years Throughout my life, I have been particularly enthusiastic in team building. I have a special ability to nurture effective communication, cohesiveness, and collaboration in teams. I lead by example and always seek to promote good and constructive behavior. I believe in synergistic integration of profound interpersonal, professional, and intellectual skills in achieving goals in

Unit4legal Essay Example | Topics and Well Written Essays - 250 words

Unit4legal - Essay Example The office management will be demanded to make compensate Samantha for the injury and pay for the medical bill that may be incurred. The Indiana comparative fault statute also includes the sharing of the fault that led to the injuries or losses. The office management can thus argue that Samantha should take blame for the injury by failing to be careful and because of the distraction that was caused by her two year old child. The statute states that in case the claimant causes more than 50% of the fault, no compensation will be awarded. However, in case the percentage of fault by the claimant is less than 50%, s/he will be granted the right to fair compensation from the defendant (Indianas comparative fault act 23). Moreover, the Indiana act also consider instances in which the various claimants can be considered as a single party because of their relationship (Indianas comparative fault act 26). At the same time, where the cause of the fault is attributed to a third party, the defendant can claim mitigation since s/he did not intend to cause the harm. On the contrary, full compensation will be awarded to the claimant if there is proof that the fault was intentional and that the defendant had total control on the cause and impact of the fault. The US comparative negligence also has similar provisions in case of injuries and losses that arise because of tortuous acts. In summary, the Indiana comparative fault statute lays down factors that the jury puts into consideration when awarding damages, how the proportion of faults is distributed among the parties and what determine the damages to be

Psychology Notes Essay Example for Free

Psychology Notes Essay 1) Four big ideas in psychology: a. Critical thinking is smart thinking b. Behavior is a bio psychosocial event c. We operate with a two-track mind (Dual processing) d. Psychology explores human strengths as well as challenges 2) Why do psychology? e. The limits of intuition and common sense i. Enough to bring forth answers regarding human nature. ii. May aid queries, but are not free of error. iii. Hindsight Bias: the â€Å"I-knew-it-all-along† phenomenon. 1. After learning the outcome of an event, many people believe they could have predicted that very outcome. iv. Overconfidence: thinking you know more than what you actually know. f. The scientific attitude v. Composed of curiosity, skepticism, and humility. vi. Curiosity: passion for exploration. vii. Skepticism: doubting and questioning. viii. Humility: ability to accept responsibility when wrong. g. The science of psychology helps make these examined conclusions, which leads to our understanding of how people feel, think, and act as they do. 3) How do psychologists ask and answer questions? h. The scientific method ix. Construct theories that organize, summarize and simplify observations. x. Theory: an explanation that integrates principles and organizes and predicts behavior or events. (Example: low self-esteem contributes to depression). xi. Hypothesis: a testable prediction, often promoted by a theory, to enable us to accept, reject or revise the theory. (Example: people with low self-esteem are apt to feel more depressed). xii. Research: to administer tests of self-esteem and depression. (Example: people who score low on a self-esteem test and high on a depression test would confirm the hypothesis). i. Description xiii. Basic purpose: to observe and record behavior. xiv. How conducted: do case studies, surveys, or naturalistic observations. xv. Weaknesses: No control of variables; single cases may be misleading. xvi. Case Study: a technique in which one person is studied in depth to reveal underlying behavioral principles. xvii. Survey: a technique for ascertaining the self-reported attitudes, opinions or behaviors of people usually done by questioning a representative, random sample of people. xviii. Wording can change the results of a survey xix. Random Sampling: when each member of a population has an equal chance of inclusions into a sample (unbiased). 2. If the survey sample is biased, its results are not valid. xx. Naturalistic Observation: observing and recording the behavior of animals in the wild and recording self-seating patterns in a multiracial school lunchroom constitute naturalistic observation. j. Correlation xxi. Basic purpose: to detect naturally occurring relationships; to assess how well one variable predicts another. xxii. How conducted: compute statistical association, sometimes among survey responses. xxiii. Weaknesses: does not specify cause and effect. xxiv. When one trait or behavior accompanies another. xxv. Correlation Coefficient: a statistical measure of the relationship between two variables. 3. Example: R = + 0.37 a. R is the correlation coefficient b. + is the direction of relationship (either + or ) c. 0.37 indicates the strength of relationship xxvi. Correlation DOES NOT mean causation. 4. Examples: d. Low self-esteem could cause depression e. Depression could cause low self-esteem f. Distressing events or biological predisposition could cause low self-esteem and depression. xxvii. Illusory Correlation: the perception of a relationship where no relationship actually exists. (Example: parents conceive children after adoption). xxviii. Order in Random Events: 5. Given random data, we look for order and meaningful patterns. 6. Given large numbers of random outcomes, a few are likely to express order. k. Experimentation xxix. Basic purpose: to explore cause and effect. xxx. How conducted: manipulate one or more factors; use random assignment. xxxi. What is manipulated: the independent variable(s). xxxii. Weaknesses: sometimes not feasible; results may not generalize to other contexts; not ethical to manipulate certain variables. xxxiii. The backbone of psychological research 7. Effects generated by manipulated factors isolate cause and effect relationships. xxxiv. Double-blind Procedure: in evaluating drug therapies, patients and experimenter’s assistants should remain unaware of which patients had the real treatment and which patients had the placebo treatment. xxxv. Random Assignment: assigning participants to experimental and control conditions, by random assignment, minimizes pre-existing differences between the two groups. xxxvi. Independent Variable: a factor manipulated by the experimenter. 8. The effect of the independent variable is the focus of the study 9. Example: when examining the effects of breast-feeding upon intelligence, breast-feeding is the independent variable. xxxvii. Dependent Variable: a factor that may change in response to an independent variable. 10. Usually a behavior or a mental process. 11. Example: in the study of the effect of breast-feeding upon intelligence, intelligence is the dependent variable. 4) Aristotle l. 384-322 B.C. m. Naturalist and philosopher n. Theorized about psychology’s concepts o. Suggested that the soul and body are not separate and that knowledge grows from experience. p. â€Å"The soul is not separable from the body, and the same holds good of particular parts of the soul.† -Aristotle 5) Wundt q. 1832-1920 r. Studied the â€Å"atoms of the mind† s. Experiments at Leipzig, Germany, in 1879, which is considered the birth of psychology. 6) William James t. 1842-1910 u. American philosopher v. Wrote psychology textbook in 1890 w. James’s student, Mary Calkins, became the APA’s first female president xxxviii. She was not able to attain her PhD from Harvard. 7) Sigmund Freud x. 1856-1939 y. Austrian physician z. Emphasized the importance of the unconscious mind and its effects on human behavior. 8) Psychology {. Originated in many disciplines and countries |. Defined as the science of mental life until the 1920s. }. 1920-1960: psychology was heavily oriented towards behaviorism. ~. Psychology: the scientific study of behavior and mental processes. 9) Pavlov, Watson and Skinner . Watson: 1878-1958 . Skinner: 1904-1990 . Emphasized the study of overt behavior as the subject matter of scientific psychology instead of mind or mental thoughts. . â€Å"Anything seems commonplace, once explained.† -Watson 10) Maslow and Rogers . Maslow: 1908-1970 . Rogers: 1902-1987 . Emphasized current environmental influences on our growth potential and our need for love and acceptance. 11) The American Psychological Association (APA) . The largest organization of psychology . 160,000 members world-wide . Followed by the British Psychological Society with 34,000 members. 12) Current perspectives . Neuroscience: how the body and brain enables emotions xxxix. How are messages transmitted in the body? How is blood chemistry linked with moods and motives? . Evolutionary: how the natural selection of traits promotes the perpetuation on one’s genes. xl. How does evolution influence behavior tendencies? . Behavior genetics: how much our genes and our environments influence our individual differences xli. To what extent are psychological traits such as intelligence, personality, sexual orientation, and vulnerability to depression attributable to our genes? To our environment? . Psychodynamic: how behavior springs from unconscious drives and conflicts. xlii. How can someone’s personality traits and disorders be explained in terms of sexual and aggressive drives or as disguised effects of unfulfilled wishes and childhood traumas? . Behavioral: how we learn observable responses. xliii. How do we learn to fear particular objects or situations? What is the most effective way to alter our behavior, say to lose weight or quit smoking? . Cognitive: how we encode, process, store and retrieve information xliv. How do we use information in remembering? Reasoning? Problem solving? . Social-cultural: how behavior and thinking vary across situations and cultures. xlv. How are we- as Africans, Asians, Australians or north Americans- alike as members of human family? As products of different environmental contexts, how do we differ? 13) Psychology’s subfields . Biological: explore the links between brain and mind. . Developmental: study-changing abilities from womb to tomb. . Cognitive: study how we perceive, think, and solve problems. . Personality: investigate our persistent traits. . Social: explore how we view and affect one another . Clinical: studies, assesses, and treats people with psychological disorders. . Counseling: helps people cope with academic, vocational, and marital challenges. . Educational: studies and helps individuals in school and educational settings. . Industrial/Organizational: studies and advises on behavior in the workplace. 14) Clinical vs. Psychiatry . Clinical Psychologist: (Ph.D.) studies, assesses, and treats troubled people with psychotherapy. . Psychiatrists: (M.D.) medical professionals who use treatments like drugs and psychotherapy to treat psychologically diseased patients. 15) Three main levels of analysis

Effects of Foreign Direct Investment

Effects of Foreign Direct Investment The removal of cross-border restrictions on international capital flows and the trend toward an integrated world economy has been a substantial progress over recent two decades. Hence, it has increased the growth of foreign direct investment(FDI) activity. Madura and Fox (2007) define foreign direct investment (FDI) as the investment in real assets (such as land, buildings, or even existing plants) in foreign countries. They also find that multinational corporations(MNCs) commonly capitalize on foreign business opportunities by engaging in FDI. They engage in joint ventures with foreign firms, acquire foreign firms, and form new foreign subsidiaries. These types of FDI can generate high returns when managed properly. A substantial investment is required, and thus can increase the risk at capital. It may be difficult for multinational corporation to sell the foreign project when the investment does not perform well as expected. In order to maximize the corporations value, it is significant for MNCs to understand the potential return and risk of FDI and analyze the potential benefits and costs before making investment decisions. 2.1.2 Motives for FDI The reason why firms locate production oversea rather than exporting from the home country or licensing production in the hose country, and the reason why firms seek to extend corporate control oversea by forming multinational corporations have been developed by many scholars. Kindleberger(1969) and Hymer(1976), emphasize various market imperfections in product, factor, and capital markets as the key motivating forces to accelerate FDI. Eun and Resnick (2004) explore some key factors that are important for corporations making decisions to invest oversea. These factors include trade barriers, imperfect labor market, intangible assets, vertical integration, product life cycle and shareholder diversification services. Dunning (1993) interpret four different types of motives for foreign direct investment: resource seeking, market seeking, efficiency seeking, and strategic asset (or capability )seeking. The first motive means that MNCs acquire some particular resources which may mainly cnsist of primary products at a lower cost in the host country than at home. The second motive depends on the expectation of new sales opportunities from the opening of markets where MNCs had no access at before. The third one refers to utilizing the specific comparative advantages of a host economy. The last one is related with long-term strategic considerations such as gaining an significant stake in the market in the long run. To be more specific, Madura and Fox (2007) indicate that MNCs engage in foreign direct investment widely because it can improve profitability and enhance shareholder wealth. In most cases, MNCs utilize FDI to boost revenues, reduce costs, or both. Revenue-related motives include attract new source of demand, enter profitable markets, exploit monopolistic advantages, react to trade restrictions and diversify internationally. Cost-related motives involve fully benefit from economies of scale, use foreign factors, use foreign raw materials, use foreign technology and react to exchange rate movements. 2.1.3 Benefits of FDI It seems unwise to conclude that both forms of geographic diversification are likely to be equally profitable or unprofitable. Errunza and Senbet (1981, 1984) find evidence to support a positive relation between excess firm value and the firms extent of international diversity by using multinational firms only. Focusing on international acquisitions, Doukas and Travlos (1988) and Doukas (1995) document that US bidders gain from industrial and international diversification. Similarly, Morck and Yeung (1991, 2001) find a positive relation between international diversification and firm value. However, they show that industrial diversification and international diversification add or destroy value in the presence or absence of intangible assets. Their findings support the view that the synergistic benefits of international diversification stem from the information-based assets of the firm. Christophe and Pfeiffer (1998) and Click and Harrison (2000) find that multinational firms trade at a discount relative to domestic firms. More recently Denis, Denis and Yost (2002), using the Berger and Ofek (1995) excess value measure and aggregate data, show that global diversification reduces shareholder value by 18%, whereas industrial diversification results in 20% shareholder loss. In contrast, Bodnar, Tang and Weintrop (1999), relying on a similar valuation measure, find share-holder value to increase with global diversification. Doukas and Lang (2003) take firms which made foreign new plant announcements during the period 1980 1992 as a sample, regardless of the industrial structure of the firm, they interpret that unrelated foreign direct investments are associated with negative announcement effects and long-term performance decreases in subsequent years, whereas related investments are associated with positive short-term and long-term performance. Although their findings indicate that both specialized and diversified firms benefit from core-business-related rather than non-core-business-related foreign direct investments, the gains are larger for diversified firms. They conclude that geographic expansion of the firms core business itself is beneficial to shareholder value. In contrast, they find that geographic expansion of the firms peripheral (non-core) business harms firm value and performance. Hence the evidence indicates that the internalization theory is more consistent with the international expans ion of the core rather than the non-core business of the firm. That is, the positive synergies from global diversification are rooted in the firms core competencies. Theories of foreign direct investment (FDI) agree on at least one major point: foreign firms mush have inherent advantages that allow them to overcome the higher costs of becoming a multinational (Hymer, 1976) These advantages may be tangible, such as an improved production process or a product innovation. They also may be intangible, such as brand names, better management structures or the technical knowledge of employees. Girma, Greenaway and Wakelin (2001) conclude that foreign firms do have higher productivity than domestic firms and they pay higher wages in the UK after their investigation. They do not find aggregate evidence of intra-industry spillovers. However, firms with low productivity relate to the sector average, in low-skill low foreign competition sectors gain less from foreign firms. FDI brings two main benefits to the host country. First, it introduces new production facilities into the domestic economy directly, or may rescue failing firms in the case of acquisition, raising overall output, employment and exports. Second, domestic governments hope that foreign firms will be unable to internalise their advantages fully, and local firms can benefit through spillover. 2.1.4 Effects of FDI Borensztein, Gregorio and Lee (1998) test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework by utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. The results suggest that FDI is significant for transfer technology, and contribute more to growth than domestic investment. Moreover, they find that the contribution of FDI to economic growth is improved by its interaction with the level of human capital in the host country. However, the empirical results imply that FDI is more productive than domestic investment only when the host country has a minimum threshold stock of human capital. Thus, FDI contributes to economic growth only when a sufficient absorptive capability of the advanced technologies is available in the host economy. Investigating the effect of FDI on domestic investment, they find that the inflow of foreign capital à ¢Ã¢â€š ¬Ã‹Å"crowds in domestic investment rather than à ¢Ã¢â€š ¬Ã‹Å"crowds out. FDI support the expansion of domestic firms by complementarity in production or by increasing productivity through the spillover of advanced technology. A one-dollar increase in the net inflow of FDI is associated with an increase in total investment in the host economy of more than one dollar, but do not appear to be very robust. Thus, it appears that the main channel through which FDI contributes to economic growth is by stimulating technological progress, rather than by increasing total capital accumulation in the host economy. Markusen and Venables (1999) develops an analytical framework to assess the effects how an FDI project affect local firms in the same industry. There are two forces for the effect of entry of a multinational firm on the domestic industry. One is a competition effect, under which multinationals displace domestic final-goods producers, and the other is a linkage effect back to intermediate-goods producers, creating complementarities which could benefit domestic final-goods producers. They explore the determinants of the relative strengths of these effects. In circumstances of initial equilibrium with no local production, multinational entry can push the economy over to an equilibrium with local production in both the intermediate and final-goods industries, with a resulting welfare improvement. They then pay attention to endogenise the entry decision of multinational firms. It may now also be the case that multinationals provide the initial impetus for industrialisation, but the developed local industry creates sufficiently intense competition to eventually drive the multinationals out of the market. Hobday (1995) finds initial multinational investments in developing East Asia created backward linkage effects to local suppliers in a large number of situations. There are some examples such as computer keyboards, personal computers, sewing machines, athletic shoes, and bicycles in Taiwan. 2.2 Cost of capital and capital structure Many major firms through the world have begun to internationalize their capital structure by raising funds from foreign as well as domestic sources. As a result, these corporations become multinational not only in the scope of their business activities but also in their capital structure. This trend reflects not only a conscious effort on the part of firms to lower the cost of capital by international sourcing of funds but also the ongoing liberalization and deregulation of international financial markets. If international financial markets were completely integrated, it would not matter whether firms raised capital from domestic or foreign sources because the cost of capital would be equalized across countries. On the other hand, some markets are less than fully integrated, firms may be able to create value for their shareholders by issuing securities in foreign as well as domestic markets. Cross-listing of a firms shares on foreign stock exchanges is one way a firm operating in a segmented capital market can lessen the negative effects of segmentation and also internationalize the firms capital structure. For example, IBM, Sony, and British Petroleum are simultaneously listed and traded on the New York, London, and Tokyo stock exchanges. By internationalizing its corporate ownership structure, a firm can generally increase its shares price and lower its cost of capital. 2.2.1 Definition of cost of capital Eun and Resnick define the cost of capital as the minimum rate of return an investment project must generate in order to pay its financing costs. If the return on an investment project is equal to the cost of capital, under taking the project will leave the firms value unaffected. When a firm identifies and undertakes an investment project that generate a return exceeding its cost of capital, the firms value will increase. It is significant for a value-maximizing firm to try to lower its cost of capital. Madura and Fox (2007) explain that a firms weighted average cost of capital (referred to as Kc ) can be measured as: Kc = [D/(D+E )] * Kd * ( 1-t ) + [E / (D+E)] * Ke Where: D = market value of firms debt Kd = the before-tax cost of its debt t = the corporate tax rate E = the firms equity at market value Ke = the cost of financing with equity The ratios reflect the percentage of capital represented by debt and equity, respectively. In total the cost f capital, Kc is the average cost of all providers of finance to the firms. A multinational company finances its operations by using a mixture of fixed interest borrowing and equity financing that can minimize the overall cost of capital (the weighted average of its interest rate and dividend payment). By minimizing the cost of capital used to finance a given size and risk of operations ,financial managers can maximize the value of the company and therefore maximize shareholder wealth. According to the different size of firm, international diversification, exposure to exchange rate risk, access to international capital markets and exposure to country risk, the cost of capital for MNCs may different from that for domestic firms. 2.2.2 Costs of capital across countries Madura and Fox (2007) interpret that the reason why cost of capital is different among countries is relevant for three reasons. First, MNCs based in some countries may have more competitive advantages than others not only for the different technology and resources across countries, but also the cost of capital. MNCs in some countries will have a larger set of feasible projects with positive net present value because of the lower cost of capital, hence these MNCs can increase their world market share more easily. MNCs operating in countries with a higher cost of capital will be forced to decline projects. Second, MNCs may be able to adjust their international operations and sources of funds to capitalize on differences in the cost of capital among countries. Third, the different component as debt and equity in the cost capital can explain why MNCs based in some countries tend to use a more debt-intensive capital structure than others. To estimate an overall cost of capital for an MNCs, it needs to combine the costs of debt and equity, and weight the relative proportions of debt and equity. The cost of debt to a firm is primarily determined by the risk-free interest rate in the currency borrowed and the risk premium required by creditors. Risk-free interest rate is determined by the interaction of the supply and demand for funds. Factors include tax laws, demographics, monetary policies and economic conditions can influence the supply and demand then affect the risk-free rate. The risk premium on debt can vary among countries because of the different economic conditions, relations between corporations and creditors, government intervention, and degree of financial leverage. In addition, a firms cost of equity represents an opportunity cost what shareholders could earn on investments with similar risk if the equity funds were distributed to them. This return on equity can be measured as a risk-free interest rate th at could have been earned by shareholders, plus a premium to reflect the risk of the firm. According to the different economic environments, the risk premium and the cost of equity will vary among countries. 2.2.3 MNCs capital structure decision Madura and Fox.(2007) indicate that an MNCs capital structure decision includes the choice of debt versus equity financing within all of its subsidiaries, hence the overall capital structure is combined of all subsidiaries capital structures. The advantages of using debtor equity vary according to the corporate characteristics specific to each MNC and specific to countries where the MNCs establish subsidiaries. They interpret some specific corporate characteristics which can influence MNCs capital structure. MNCs with more stable cash flows can deal with more debt because their cash flows are constant to cover periodic interest payments. In contrast, MNCs with erratic cash flows might prefer less debt. MNCs with lower credit risk have more access to credit, their choice of using debt or equity can be affected by factors which influence credit risk. MNCs with high profit may be able to finance most of investment with retaining earnings and use an equity-intensive capital structure, while others with small level of retained earnings may prefer on debt financing. The subsidiaries borrowing capacity may be increase and need less equity financing once the parent backs the debt. Agency costs are higher when a subsidiary in foreign country can not be monitored easily be investor from parents country. In addition, they also describe the specific country characteristics unique to each host country can influence MNCs choice of debt versus equity financing and thus influence their capital structure. Firstly, some host countries have stock restrictions which means the governments allow investment only in local stocks. This kind of barrier of cross-border investing, potential adverse exchange rate and tax effects can discourage investment outside home countries. MNCs operated in these countries where investor have fewer stock investment opportunities may be able to raise equity at a relatively low cost, and they would prefer using more equity by issuing stocks. Secondly, according to the government-imposed barriers on capital flows along with potential adverse exchange rate, tax and country risk effects, loanable funds do not always flows th where they are needed most and the price of them can vary across different countries. MNCs may be able to obtain loanable funds at lower cost in s ome countries and they will prefer the debt financing. Thirdly, regard of the potential weakness of the currencies in subsidiaries host countries, an MNC may attempt to finance by borrowing currencies instead of relying on parent funds. Subsidiaries may remit a smaller amount in earning because they can make interest payments on local debt, and thus reduce the exposure to exchange rate. Conversely, subsidiaries may retain and reinvest more of its earnings when the parent believes a subsidiaries local currency will appreciate against its own currency. The parent may provide an cash infusion to finance growth in the subsidiaries, and thus transfer the internal funds from the parent to subsidiary possibly resulting in more external financing by the parent and less debt financing by the subsidiary. Fourthly, possibility of a kind of country risk is that the host country will temporarily block funds to be remitted by subsidiary to the parent. Thus aubsidiraies may prefer to local debt fi nancing. At last, MNCs make interest rate payments on the local debt when they are subject to a withholding tax. Foreign subsidiaries may also use local debt if the host country impose high corporate tax rates on foreign earnings. Bancel and Mittoo (2004) survey on the cross-country comparisons of managerial views on determinants of capital structure in a sample of 16 European countries: Austria, Belgium, Greece, Denmark, Finland, Ireland, Italy, France, Germany, Netherlands, Norway, Portugal, Spain, Switzerland, Sweden, and the UK. They show that factors related to debt are influenced more, and those related to equity are influenced less, by the countrys institutional structure, especially the quality of its legal system. They find that financial flexibility and earnings per share dilution are primary concerns of managers in issuing debt and common stock, respectively. Managers also value hedging considerations and use windows of opportunity when raising capital. This evidence strengthens arguments of La Porta et al. (1997, 1998) that the availability of external financing in a country is influenced primarily by its legal environment. Since agency costs of debt are likely to be higher in countries with lower quality of legal systems, this evidence is also consistent with theories of capital structure such as agency theory that assign a central role to debt contracts and bankruptcy law (Harris and Raviv, 1991). They find that although a countrys legal environment is an important determinant of debt policy, but it plays a minimal role in common stock policy. They find that firms financing policies are influenced by both their institutional environment and their international operations. They also show that firms can adopt strategies to mitigate the negative effects of the quality of the legal environment in their home country. For instance, firms in civil-law countries have significantly higher concerns for maintaining target debt-to-equity ratios and matching maturity than do their peers in the common-law countries. Further, they find that firms operating internationally have significantly different views than do their peers in several ways. For example, firms that have issued foreign debt or equity in the sample during the last ten years are more concerned about credit ratings. Firm-specific variables that are commonly used in the capital structure literature to explain leverage also expla in cross-country differences in managerial rankings of several factors. For example, large firms are less concerned about bankruptcy costs, and high growth firms consider common stock as the cheapest source of funds and use windows of opportunity to issue common stock. These results support the arguement by Rajan and Zingales (1995, 2003), that firms capital structures are the result of a complex interaction of several institutional features as well as firm characteristics in the home country. Their results support that most firms determine their optimal capital structure by trading off factors such as tax advantage of debt, bankruptcy costs, agency costs, and accessibility to external financing. They confirm the conclusions of Titman (2002): Corporate treasurers do occasionally think about the kind of trade-offs between tax savings and financial distress costs that we teach in our corporate finance classes. However, since this trade-off does not change much over time, the balancing of the costs and benefits of debt financing that they emphasize much is not MNCs major concern. They spend much more time thinking about changes in market conditions and the implications of these changes on how firms should be financed. Lee and Kwok (1988) examine the impact of international environmental factors on some firm-related capital structure determinants which in turn affect the MNCs overall capital structure. They consider international environmental variables of political risk, international market imperfections, complexity of operations, opportunities for international diversification, foreign exchange risk and local factors of host countries, and test agency costs and bankruptcy costs. They find that MNCs tend to have higher agency costs of debt according to Myers definition than DCs. This finding remained unchanged even when size and industry effects were controlled. Though MNCs appeared to have lower bankruptcy costs than DCs, the difference largely disappeared when the size effect was controlled. Quite contrary to the conventional wisdom, the empirical findings showed that MNCs tended to be less leveraged than DCs. This finding remained even when the size effect was controlled. However, when compani es were separated under different industry groups, the results varied significantly. Burgman (1996) directly estimate the effect of foreign exchange risk and political risk on the capital structure of MNCs. Using the foreign tax ratio to classify firms as either MNCs or DCs and controlling for industry and size effects, Burgman finds that MNCs have lower debt ratios and higher agency costs than DCs. Furthermore, international diversification does not appear to lower earnings volatility. To estimate the sensitivity of a firm to foreign exchange risk, Burgman conducts a regression analysis of the stock returns of each sample firm on the returns of an index of U.S. stocks and on the U.S.$:SDR returns. His political risk measure is based on the following ratio: number of low political risk countries to the total number of countries in which the firm operates. Low political risk countries are the top 20 in the country risk rankings provided by Euromoney in 1989. The results of a regression analysis for his sample of MNCs suggest that the debt ratios of these companies are positively related to both risks. Burgman concludes that this evidence is consistent with the hypothesis that MNCs use debt policy as a tool to hedge foreign exchange risk and political risk. Chen et al. (1997) conducted regression analyses to investigate the effect of international activities (as measured by foreign pre-tax income) on capital structure. They report that even after controlling for firm size, agency costs of debt, bankruptcy costs and profitability, the long-term debt ratios of MNCs are lower than those of DCs. However, within their sample of MNCs, debt ratios increase with the level of international activities. 2.2.4 Segmented capital market A capital market for asset claims is integrated when the opportunity set of investments available to each and every investor is the universe of all possible asset claims. In contrast, a capital market is segmented when certain groups of investors limit their investments to a subset of the universe of all possible asset claims. Such market segmentation can occur because of ignorance about the universe of possible asset claims, or because of transactions costs (brokerage costs, taxes, or information acquisition costs), or because of legal impediments. From an international perspective, market segmentation typically occurs along national borders, a condition wherein investors in each country acquire only domestic asset claims. Grubel, Levy and Sarnat, and Lessard employ a mean-variance portfolio theoretic framework, have stressed the benefits of diversifying investments across national borders, namely the pooling of risks that results from investing in projects that are less than perfectly correlated. Subrahmanyam points out that when segmented capital markets are integrated, in addition to the diversification effect (always positive), there is a wealth effect (possibly negative) which arises out of changes in the macro-parameters of the risk-return relationship. For the special cases of quadratic, exponential, and logarithmic utility functions, it can be shown that international capital market integration is Pareto-optimal, that is, the welfare of individuals in the integrated economies will not decline, and will generally improve. The positive effect of an expansion in the opportunity set offsets any negative wealth effect. The market reformed and liberalized in developed economies in the 1970s and emerging economies during the second half of the 1980s led to the removal of many barriers. The deregulation and the development of local equity markets allowed the possibility of foreign portfolio investments (FPIs). Overall, FPIs would provide a new source of capital and internationalize the domestic capital markets. Subsequent improvements in risk sharing and risk matching would cause the cost of capital to fall. Errunza and Miller (2000 ) use a sample of 126 firms from 32 countries, document a significant decline of 42% in the cost of capital. In addition, they show the decline is driven by the ability of U.S. investors to span the foreign security prior to cross-listing. The findings support the hypothesis that financial market liberalizations have significant economic benefits. 2.2.5 Interaction between subsidiary and parent financing decisions In segmented markets the parent and its subsidiaries will generally have different valuation objectives and investment-acceptance criteria. Under some conditions these depend on the international financing mix. Decentralization can be optimal in the sense of global maximization, provided that the parent is unrealistically free, ex-ante, to optimize its percentage ownership in the subsidiaries at the beginning of each planning period. In the case of a two-country firm, the subsidiaries maximands are independent of the parents. But when the parents ownership position is predetermined at a fixed level, as it is normally, the situation is radically different. Market values cannot then be maximized independently and Pareto optimization is required. Michaels (1974) main result is that, unless agreement can be reached on a compensation principle, the joint ventures cost of capital will be indeterminate. In such circumstances optimal financial planning for the MNC as a whole may be impossibl e. Concluding remarks draw attention to the attendant possibility that the MNC in this case may be unstable and/or inefficient. 2.2.6 The MNCs capital structure decision An MNCs capital structure decision involves the choice of debt versus equity financing within all of its subsidiaries. Thus, its overall capital structure is essentially a combination of all of its subsidiaries capital structures. MNCs recognize the tradeoff between using debt and using equity for financing their operations. The advantages of using debt as opposed to equity vary with corporate characteristics specific to each MNC and specific to the countries where the MNC has established subsidiaries. Madera and Fox (2007) indicate some common firm-specific characteristics that affect the Macs capital structure such as stability of Macs cash flows, Macs credit risk, Macs access to retained earnings, Macs guarantees on debt and Macs agency problems. They also point the unique host country characteristics can influence the MNCs choice of debt versus equity financing and therefore influence the MNCs capital structure. These characteristics include stock restrictions in host countries, interest rates in hose countries, strength of host country currencies, country risk in host countries and tax laws in host countries. 2.3 Risk analysis 2.3.1 Country risks With operations under the jurisdiction of a foreign government the firm is also exposed to political risk, therefore it must estimate the potential costs it will face due to unstable governments, regime change and changes in policies. Political risk may be defined as a particular exposure to risk which depends on the actions of a government, and its assessment or analysis for a MNC is a decision-making tool for investing in foreign countries. An MNC must assess country risk not only in countries where it currently does business but also in those where it expects to export or establish subsidiaries. Many country risk characteristics related to the political environment can influence an MNC. Madura and Fox (2007) indicate that an extreme form of political risk is the possibility that the host country will take over a subsidiary. In some cases of expropriation, some compensation is awarded, and the amount is decided by the hose country government. In other cases, the assets are confiscated and no compensation is provided. Expropriation can take place peacefully or by force. They also explore other common forms of country related risks include attitude of consumers in the host country, actions of host government, blockage of fund transfers, currency inconvertibility, war, bureaucracy and corruption. Over recent decades, there has been a significant increase in political risk for MNCs. This is true not only for an MNCs operations in developing countries, but also for those in developed countries. Governments have felt the need to respond to various pressure groups aimed at curbing the power of MNCs. For example, oil companies may face unfavourable legislation designed to pay for the damage to environment. Developing countries may have to respond to populist sentiments or worsening economic circumstances by seeking to renege on contracts signed by previous regimes. Another risk area which has grown in recent years has been the strength of fundamentalist religious groups in a number of eco