3 pages international finance research paper

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The global financial crisis from 2007-2011 produced adverse effects on multinational corporations world wide. Select a US based MNC and analyze the relationship between exchange rates and one other variable before and after the crisis. Note that exchange rates could be the dependent or independent variable depending on your research interest. Compare and contrast the results in the pre and post crisis period.

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ProfKelseyJ
School: New York University

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Running head: GENERAL MOTORS AND 20O7-2011 FINANCIAL CRISIS

GENERAL MOTORS AND 20O7-2011 FINANCIAL CRISIS
(Author’s name)
(Institutional Affiliation)

1

GENERAL MOTORS AND 20O7-2011 FINANCIAL CRISIS

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General Motors and 2007-2011 Financial Crisis
Introduction
MNC refers to a powerful influence on the patterns of global trade and future movements
in the international firm. Multinational Corporation refers to a company having headquarters in
one country yet operates in several countries. Most of the U.S companies are multinational; one
of the known multinational companies in America is the General Motors (Noorderhaven &
Harzing, 2003). The increasing growth of multinationals was influenced by the end of the
Second World War. The growth of multinationals is often influenced by many factors including
trade barriers that may cause exporting to a problem, or the need to produce goods that are local
market tailored. It also enables an organization to have a greater control over the product quality
and management.
In 2007, Alan Greenspan who was a former Federal reserve Chairman gave a warning of
a possible recession and also raised concerned with the deficits of U.S. budget. These comments
caused extensive stock market sale-off. Later on February, Ben Bernanke Fed Chairman testified
in front of the House Committee and assured the markets that United States would increasingly
benefit from Goldilocks economy. By March, the Federal Reserve Bank Chairman President
William Poole predicted a growth in the economy by 3% and predicted that the stock prices were
going to rebound. Before the end of March, the stocks markets rebounded and the and the Dow
Jones Industrial Average increased by 157 points after the previous drop of more than 600 points
(Noorderhaven & Harzing, 2003). This meant that everything was not right with the US stock
market as it reflected on the investors’ beliefs on the future earnings and value of the corporate.

GENERAL MOTORS AND 20O7-2011 FINANCIAL CRISIS

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Literature Review
The fail of General Motors and eventual bankruptcy marked only the along story of
decline and management. From the beginning of the 2007 the collapse of the General Motor’s
industry had been seen to be inevitable. It application for protection from creditors led to the
major industry bankruptcy in the American history (Noorderhaven & Harzing, 2003). All along
until 2008, GM had been the world’s largest carmaker with a production capacity of over 9
million trucks and cars per year from 34 countries worldwide. The company had a total of 463
subsidiaries with a total employee number of 234,500 people of which up to 91,000 were
Americans. The company also provided pension benefits and healt...

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