Long-term Financing of Multinational Corporations
Long-term Financing of Multinational Corporations

Author(s): Lilyana Denkova
Subject(s): Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, Business Economy / Management, Economic policy
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: long-term financing; Multinational corporations (MNCs); sustainable growth; investment efficiency; financial instruments
Summary/Abstract: This report examines the long-term financing of multinational corporations (MNCs), highlighting its significance in promoting sustainable growth, stability, and investment efficiency. Long-term financing provides MNCs with the necessary capital to undertake substantial investments without the frequent rollover risks associated with short-term financing. By extending the maturity structure of financial instruments, companies can align their funding sources with their investment horizons, thereby enhancing performance and reducing vulnerability to market fluctuations. The report discusses various sources of long-term financing, including bonds, bank loans, equity financing, and alternative instruments. It emphasizes that while banks predominantly provide long-term financing, the role of capital markets is becoming increasingly important, particularly for larger firms. The analysis also explores how different sectors utilize long-term financing, with variations based on economic conditions and corporate strategies. Furthermore, the report presents statistical data on the trends in long-term financing, showcasing the growth of corporate bond issuance and long-term loans over the past decade. It identifies key challenges faced by MNCs in accessing long-term finance, including market volatility and regulatory environments, while suggesting potential solutions such as enhancing the role of non-bank intermediaries. In conclusion, long-term financing is crucial for the sustained growth of multinational corporations. By understanding and effectively utilizing various financing options, MNCs can secure the capital needed for future investments, drive innovation, and contribute to overall economic development.

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