Impact of Technology on Trade

Impact of Technology on Trade Technology plays a crucial role in the development of countries. It is very important both for developed countries and developing countries as technology progress will enable countries to be more competitive in the global market. Thus progress in technology helps countries to develop the economy and strengthens their trading positions in the competitive global market (Sabir, 2010). With the development of technology, high-tech products will become the major players in international trade. The traditional primary products and ordinary manufacturing goods will account for less in the international trade business than before. In order to illustrate the impact of technology on trade and development for the country, this essay will take South Korea, a developed country and the Samsung products as example to analyze the way the technology influences the countrys development and its trade. Technology development in South Korea The development of technology can decide the future of the country in terms of its economy growth and its position in the international community. South Korea, as all we know, is a lively example in the technology research and development. Forty years ago, South Korea was still a laggard agricultural country and was empty in science technology fields. However, during 40 years endeavor, South Korea has made outstanding performance and achievements in the technology development. Its innovation capability is improved a lot and the distance to developed countries regarding the technology aspect is becoming closer. Since 1970s and 1980s, the science technology policies of South Korea have been gradually shifted from introduction imitation model to self-development and innovation (Viotti, 2002). Therefore, since then, high-tech projects, such as sophisticated electronics, new materials, semiconductors, precision chemistry etc. have been developed rapidly in South Korea. That Semi-conduc tors enterprises, such as Samsung, can successfully compete in the international semiconductor market can not separate from the independent technological innovation. Thanks to the technology progress, South Korea has made great development in economy. As we know, economy and technology are two essentials which can not be separated from each other for the country. The progress of technology will promote the development of the countrys economy, meanwhile, economy growth will enable the country more capital to the technology research. From the experience of developed countries, their fast development in economy can not be separated from their progress in technology. Technology is becoming the core for the developed countries (Hausmann and Rodrik, 2003). Impact of technology on trade and economy growth Economic development of South Korea started in 1950s and achieved a take-off in economy growth in 1960s. In the initial stage, South Korea applied inward economy growth strategy; however, since 1962 the country began to implement an export-oriented economy development strategy. South Korea is severely dependent on the external markets since its internal market is very limited. The country is highly focused on the export business to create foreign exchange and import the scarce resources. With the development in high-technology fields, South Korea has realized to increase the exports of the high-tech products which have successfully contributed to a rapid economic growth for the country. South Korea has achieved a considerable growth in its GNP from 87 USD in 1962 to 10 936 USD in 2001. This is close to the highly-developed countries. Among the exporting volumes, the high-tech products are increasing year by year. In 1988, the high-tech products accounted for 15.97% of the total expor ting volume. In 1999, the high-tech products reached to 32.2% (Kwon, 2010). The progress in technology has greatly helped South Korea in achieving good result in the global trade market and resulted in a great growth in GDP and its overall economy. Samsung Electronic is a typical successful example in the research and development of technology for South Korea or even for the whole Asian countries. Many technological and electronic manufacturers in Asian countries are trying to learning from Samsung Company. Samsung Electronic Company has made great contribution to South Koreas economic development. Samsung has got its white goods and other products such as mobile phones famous in the global marketplace. In 2000, the export amount of Samsung Electronic has reached to 18.6 billion US dollars which accounted for 11 percent of the total exporting value. In 2004, Samsung has made a breakthrough of 50 billion US dollars of exporting value and accounted for 21% of the total export value in South Korea (Kang and Jin, 2006). The reason why Samsung products can take a great market share in the global trade market is highly dependent on the technology progress. Take Samsung mobile phone as example, with the continuous innovation and progr ess made in the technological field, Samsung mobile phone is now become one of the leading mobile brands in the world. It has already posed a threat to Nokia and Motorolas leading positions in the global mobile phone market (Uimonen, 2000). Facing the fierce competition environment in the global mobile phone market, Samsung mobile phone maintains its strategy to position high-end products for the people with certain consuming capability. High-end products need high-technology to support and continuous improvement in the technology innovation to maintain the high price. Therefore, Samsung never stops its technology research and contributes considerable amount of money into new technology research and innovation every year. Besides the mobile phone area, Samsung is also making efforts to expand its other electronic products with high technology, such as TV, LED, refrigerator, and other white goods in the global markets (Bonaglia, Goldstein and Mathews, 2007). Of course, China is its l argest trading partner and Samsung products have covered a relatively large market share in China. Conclusion In conclusion, technology progress is the major power and source to speed up the development of the social economy for a country. Nowadays, as peace and development are the major theme for the international communities, high-technology is attached great importance in boosting the economy growth for a country. At the same time, under the globalization trend, the development of technology will help the country to be more competitive in the global trade market thus to boost the countrys economy development.

Example of Leadership Essay

From the Forbes’ article â€Å"Leadership Lessons from Admiral Michelle Howard, The Highest Ranking Woman in Naval History†, written by Kathryn Dill, tells the history of the four-star admiral and Vice Chief of Naval Operations, the second highest position in the Navy, Michelle Howard and how she became the first American woman to get this position. It is all about her leadership. The first aspect that she points out is about innovation. She takes the example of outside companies and does not have fear to make changes. She says: â€Å"There’s great ideas out there–it’s having the courage to go ask people about what they’re doing that’s different, and saying, ‘I wonder how I could apply that to my organization.’† It is important to all organizations keep changing. She has an envision of the future and because of her way to manage her team, it will be always better, by experimenting and learning from those changes. Moreover, she encourages creativity and â€Å"creates an environment where employees can meet personal goals and they’ll strive that much harder for the professional ones.† It is clear that she wants everyone to share the same vision and seek their goals, even the professional or the personal ones. Doing this, she encourages their hearts joining their lives’ purposes. At last, she is a great example for her co-workers. She is a great leader who behaves and work in a consistent way. Furthermore, she is strong and brave. Someone who people could trust. Work Cited Dill, Kathryn. â€Å"Leadership Lessons From Admiral Michelle Howard, The Highest RankingWoman In Naval History.† Forbes. Forbes Magazine, 1 July 2014. Web. 23July 2014. <http://www.forbes.com/sites/kathryndill/2014/07/01/leadership-lessons-from-admiral-michelle-howard-the-highest-ranking-woman-in-naval-history/&

Test Bank Ch8 3616 Butler

PART IV Managing the Risks of Multinational Operations Chapter 9 The Rationale for Hedging Currency Risk True/False 1. In a perfect financial market, financial contracts are zero-NPV investments. ANS: True. 2. If hedging currency risk is to add value to the stakeholders of the firm, then hedging must impact either expected future cash flows or the cost of capital or both. ANS: True. 3. If financial markets are informationally efficient, then corporate financial policy is irrelevant. ANS: False. Don’t confuse informational efficiency with a perfect market.Although the perfect market conditions ensure informational efficiency, informationally efficient markets can be imperfect. 4. Perfect financial markets are a necessary condition for corporate risk hedging to have value. ANS: False. Market imperfections are necessary conditions. 5. In perfect financial markets, corporate financial policy is irrelevant. ANS: True. 6. In a perfect financial market, the law of one price holds. AN S: True. 7. Equal access to perfect financial markets ensures that individual investors can replicate any financial action that the firm can take. ANS: True. 8.In perfect financial markets, corporate hedging policy has no value. ANS: True. 9. In perfect financial markets, corporate investment policy is irrelevant. ANS: False. Firm value depends entirely on the firm’s investments in a perfect financial market. 10. If corporate financial policy is to have value, then at least one of the perfect market assumptions cannot hold. ANS: True. 11. Real-world financial markets are perfect markets. ANS: False. Perfect markets are a theoretical ideal and not a practical reality. 12. Market imperfections are greater across national boundaries than within national boundaries.ANS: True. 13. In perfect financial markets, multinational corporations have an advantage over domestic firms in financing their investments. ANS: False. The law of one price holds in perfect financial markets. 14. Mul tinationals have a comparative advantage over domestic firms in exploiting cross-border differences in financial markets. ANS: True. 15. Progressive taxation is a system in which larger taxable incomes receive a higher tax rate. ANS: True. 16. Tax preference items are goods that are sold on a tax-free basis. ANS: False.Tax preference items are items such as tax loss carryforwards and carrybacks and investment tax credits that are used to shield corporate taxable income from taxes. 17. A call option is an option to buy an underlying asset at a predetermined price. ANS: True. 18. A call option is an option to â€Å"call in† or demand payment on a loan. ANS: False. A call option is an option to buy an underlying asset at a predetermined price. 19. Indirect financial distress costs are relatively unimportant for firms selling products for which quality and after-sale service are important.ANS: False. Reputation is easily eroded in these instances. 20. Managerial gamesmanship is l east prevalent during financial distress. ANS: False. Gamesmanship is more prevalent during hard times. 21. Option values increase with an increase in the volatility of the underlying asset. ANS: True. 22. A decrease in the variability of firm value is good news for debt and bad news for the equity call option, other things held constant. ANS: True. 23. Corporate hedging of business risk unambiguously increases shareholder wealth when the firm is in financial distress. ANS: False.Because debtholders have first claim on corporate assets, corporate hedging of business risk helps debtholders first and may or may not help equityholders. 24. In the real world, corporate hedging policy can change expected future cash flows but is unlikely to reduce the cost of debt. ANS: False. Hedging policy can decrease the variability of firm value and can thus reduce the risk of debt and the required return charged by debtholders. 25. Direct costs of financial distress are far more important to corpor ate hedging decisions than are indirect costs. ANS: False.The indirect costs of financial distress influence the activities of firms not just in bankruptcy but prior to bankruptcy as well. 26. Underinvestment occurs when debtholders refuse to invest additional capital into the firm during financial distress. ANS: False. Underinvestment occurs when equity foregoes positive-NPV investments. 27. In financial distress, equity has an incentive to take on large risks in order to increase the value of the equity call option. ANS: True. 28. In Miller-Modigliani’s perfect world, the firm’s optimal investment criterion is â€Å"Accept all positive-NPV projects. ANS: True. 29. In practice, management’s objective is to maximize shareholder wealth. ANS: False. Managers act nominally as equity’s agents but, in actuality, in their own best interests. 30. Managers have little incentive to hedge company-specific risks. ANS: False. As undiversified stakeholders, managers are concerned with both systematic and unsystematic risk. 31. Managers have an incentive to hedge their unit’s transaction exposure to currency risk. ANS: True. 32. Hedging can increase firm value by reducing the costs of agency conflicts between managers and shareholders.ANS: True. 33. Exchange-traded options and futures contracts have a fixed cost per contract so that costs are proportional to the number of contracts traded. ANS: True. 34. The costs of hedging through operations are likely to be less burdensome for a large multinational corporation with diversified operations than for a small, less-diversified firm. ANS: True. Multiple Choice 1. The perfect market assumptions include each of the following except ____. a. equal access to market prices b. equal access to costless information c. frictionless markets d. rational investors e. table governments ANS: E 2. Frictionless financial markets could have which of the following? a. agency costs b. bid-ask spreads c. broker age fees d. government intervention e. irrational investors ANS: E 3. Which risk management guidelines in a) through d) is not recommended by the Group of Thirty Global Derivatives Study Group? a. assess the credit risk arising from derivatives activities b. combine authority over trading and bookkeeping functions into a single department c. quantify market risk under adverse market conditions and perform stress tests d. alue derivatives positions at market e. all of the above are recommended ANS: B 4. Which of a) through d) is unlikely to result in a decision to hedge currency risk? a. bid-ask spreads on foreign exchange b. costs of financial distress c. differential taxes on income from different tax jurisdictions d. stakeholder game-playing e. all of the above are incentives to hedge ANS:A 5. Which of the following factors does not contribute to tax schedule convexity? a. Alternative Minimum Tax (AMT) rules in the United States b. progressive taxation c. sales taxes d. ax prefere nce items e. all of the above contribute to tax schedule convexity ANS: C 6. Indirect costs of financial distress impact the firm in each of the following ways except ____. a. higher financial costs b. higher legal costs in bankruptcy c. higher operating costs d. lower revenues e. stakeholder gamesmanship ANS: B 7. Which of statements a) through c) regarding costs of financial distress is false? a. Both debt and equity unambiguously benefit from corporate risk hedging. b. Hedging can increase expected cash flows by reducing the costs of financial distress. c.Hedging can reduce debtholders’ required return and hence the cost of capital to the firm. d. All of the above are ANS: True. e. None of the above are ANS: True. ANS: A 8. Which of the following was most responsible for the collapse of Barings Bank? a. bankruptcy proceedings b. failure to monitor the activities of its traders c. index arbitrage d. index futures and options trading e. the 1991 fall in share prices on the T okyo stock exchange ANS: B 9. Management has an incentive to hedge which of the following exposures? a. operating exposure b. transaction exposure c. ranslation (accounting) exposure d. all of the above e. none of the above ANS: D 10. Tax schedules are said to be progressive when ____. a. the effective tax rate is greater at high levels of taxable income than at low levels b. the effective tax rate is greater at low levels of taxable income than at high levels c. they do not discriminate on the basis of race, creed, or color d. when tax rates vary by the age of the taxpayer e. none of the above ANS: A Problems 1. In what way is equity a call option on firm value? Tax schedule convexity: progressive taxation 2.Suppose corporate income up to $250,000 is taxed at a rate of 25 percent. Income over $250,000 is taxed at 40 percent. The taxable income of Quack Poultry will be either $200,000 or $300,000 with equal probability. Quack’s income variability arises entirely from an expos ure to currency risk. a. Draw a graph like Figure 9. 2 depicting tax schedule convexity in the United States. b. What is Quack’s expected tax liability if it does not hedge its currency risk? c. What is Quack’s expected tax liability if it is able to completely hedge its currency risk exposure and lock in taxable income of $250,000 with certainty? . In what way does hedging have value for Quack Poultry? Direct and indirect costs of financial distress 3. A firm based in the United Kingdom has promised to pay bondholders ? 10,000 in one year. The firm will be worth either ? 9,000 or ? 19,000 with equal probability at that time depending on the value of the dollar. The firm will be worth ? 14,000 if it hedges against currency risk. a. Identify the values of debt and equity under unhedged and hedged scenarios assuming there are no costs of financial distress. b. Suppose the firm will incur direct bankruptcy costs of ? ,000 in bankruptcy. Identify the value of debt and of e quity under both unhedged and hedged scenarios. c. In addition to the ? 1,000 direct bankruptcy cost, suppose indirect costs reduce the asset value of the firm to either ? 6,000 or ? 18,000 (before the ? 1,000 direct bankruptcy cost) with equal probability. Hedging results in firm value of ? 12,000 with certainty. Identify the value of debt and of equity under both unhedged and hedged scenarios. d. Can hedging add value to shareholders in this problem? Problem Solutions 1.If the firm’s assets are worth more than that promised to debtholders, equity will exercise its option to buy the assets of the firm from the debtholders at the exercise price. If firm assets are worth less than the promised claim, equity will not exercise its option and debt assumes control of the firm. Tax schedule convexity: progressive taxation 2. a. [pic] b. Expected taxes with no hedging: (? )[($200,000)(0. 25)] + (? )[($250,000)(0. 25)+($50,000)(0. 40)] = (? )($50,000) + (? )($82,500) = $66,250. c. Ex pected taxes with hedging: ($250,000)(0. 5) = $62,500 < $66,250. d. Hedging allows Quack to minimize its expected tax liability. This increase in expected future cash flows to equity results in an increase in equity value. 3. a. If firm value is ? 9,000, equity will not exercise its option to buy the firm at a price of ? 10,000. In this case, equity receives nothing and debt receives ? 9,000. If the firm is worth ? 19,000, equity pays the bondholders ? 10,000 and retains the residual ? 9,000. Firm value can be broken down into E[VFIRM] = E[VBONDS] + E[STOCK] = [(? )(? 9,000)+(? )(? 10,000)] + [(? )(? 0)+(? (? 9,000)] = ? 9,500 + ? 4,500 = ? 14,000. Hedged, firm value can be broken down into VFIRM = VBONDS + VSTOCK = ? 10,000 + ? 14,000 = ? 14,000. In the absence of costs of financial distress, the reduction in the variability of firm value results in a reduction in call option value and a ?500 shift in value from equity to debt. b. Unhedged, firm value is decomposed as: E[VFIRM] = E [VBONDS] + E[STOCK] = [(? )(? 9,000 1,000)+(? )(? 10,000)] + [(? )(? 0)+(? )(? 9,000)] = ? 9,000 + ? 4,500 = ? 13,500. With hedging, VFIRM = VBONDS + VSTOCK = ? 10,000 + ? 4,000 = ? 14,000.As in the previous example, the reduction in the variability of firm value is accompanied by a ? 500 transfer of wealth from equity to debt. Hedging also avoids the deadweight ? 1,000 bankruptcy cost and yields an expected gain of (? )(? 1,000) = ? 500. In this example, debt captures the expected gain of ? 500. Equity will capture some of the gain if hedging results in lower interest payments on the next round of debt. c. Unhedged, firm value is E[VFIRM] = E[VBONDS] + E[STOCK] = [(? )(? 6,000 1,000) + (? )(? 10,000)] + [(? )(? 0)+(? )(? 8,000)] = ? 7,500 + ? 4,000 = ? 11,500.If the firm hedges, then VFIRM = VBONDS + VSTOCK = ? 10,000 + ? 2,000 = ? 12,000. This is the same as b) after including indirect costs of financial distress with an expected value of [(? )(? 9,000 6,000)+(? )(? 19,000 18,000) ] = ? 1,500+? 500 = ? 2,000. d. Hedging can add value to shareholders if they can negotiate lower interest payments on debt because of their hedging policies. Even in financial distress, equity could offer to renegotiate the bond contract to more evenly share the gain in firm value from hedging. In this way, they can share in any gain from reducing the probability and costs of financial distress.

Persuasive Speech John Smalls - 1294 Words

SPEECH 1311 PERSUASIVE ASSIGNMENT Behavioral Objective: Each student will deliver a 4 to 6 minute speech with the purpose to inform and PERSUADE their audience. Topic Selection: Each student will choose their own topic. The topic must be a SOCIAL TWO SIDED ISSUE. The student will select ONE SIDE of the issue to support and convince their audience to TAKE ACTION. See page three for possible topics. Assignments: ONE PAGE SUMMARY. Each student will submit a one page summary that includes the following: 1. their topic choice. 2. The side they will support. 3. A paragraph of WHY they support that side of the issue and how they are going to convince the audience to make a change. Also included in the one page summation†¦show more content†¦All workers must wear sanitary scrubs that are provided each morning and left at the hospital at the end of the day. If a physician, nurse, or worker leaves the hospital they must change into a new scrub on return. Strict procedures must be maintained when using needles, bandages, and medical tools. All must be sanitized with steam that reaches 400 degrees F. Finally hand washing for ALL personal staff is required after eating, using the restroom, and in between working with patients. ADVANTAGES: According to the AMA in their JAMMA publication Spring 2009 following procedures like the ones I mentioned will result in a 70% reduction of illness and save over 45,000 lives each year. CALL TO ACTION: Summary: Today I have informed you of a problem that faces us all if we are hospitalized. First I showed you the significance of the problem; secondly a plan that will solve the problem; third advantages of the plan and now I’m going to tell you what you can do. First, we need to change laws and develop penalties for hospitals that have a high rate of patients who contract illness when in their care. Hospitals who have more than a 15% rate of return patients will lose their state and federal funding. These laws can only be changed if we contact our elected officials. I am going to provide you with a list of your congressmen and women who vote for federal and state allowances to our public hospitals. Secondly, we need to change the freedom of informationShow MoreRelatedAnalysis Of Barack Obama s Speech1167 Words   |  5 PagesOutline: Introduction: In his 2004 speech, Barack Obama stated â€Å"I stand here knowing that my story is part of the larger American story, that I owe a debt to all of those who came before me, and that, in no other country on earth, is my story even possible.† This quote embodies†¦ It was meant to show†¦ The main idea guiding Obama’s speech is giving back to those who gave to you. More specifically, he wants the American people to elect John Kerry for president, as John carry embodies this goal to him.Read MoreAnalysis Of Speech At The March On Washington1146 Words   |  5 Pages’† declares John Lewis. 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Firstly, I will examine the effectiveness of Eisenhower s speech.  Ã‚   I found his speech to be well-written, it held my attention and gave a clear message to protect the future of the nation and its resources. I define a well written speech as one that can keep an audience listening and wanting more. An effective speech must also have a clear message, and not contradict itself. Eisenhower s speech concluded his