Raj Aggarwal
Encyclopedia
Raj Aggarwal is an author and contributor to the field of international business studies. Aggarwal was the Dean at the University of Akron College of Business Administration
from 2006 until 2009. He was elected as a Fellow of the Academy of International Business
. He has been a Fulbright Research Scholar. He has worked as an engineer, financial analyst, strategic planner, department chair, University budget planner, and corporate board member. He has authored or co-authored over a dozen books or monograph
s and over a hundred scholarly articles.
in 1968. He then earned his MBA in Operations Management from Kent State University
in 1970, then studied International Economics at the University of Chicago
from 1972 to 1973. He earned his doctorate in Corporate Finance and International Business at Kent State in 1975. In 2000, he became a Chartered Financial Analyst
(CFA).
and was an editor of Financial Education and Practice, a journal published by the Financial Management Association
. He has served on editorial boards of scholarly journals in international business and many journals in finance and economics. In a recent issue of the Journal of International Business Studies, Aggarwal was ranked as the most influential scholar in international business literature.
He has held many elected and appointed leadership positions in academia and in business, including; president of the Eastern Finance Association and the Northeast Ohio Financial Executives International. He has been a consultant to the UN, the World Bank, US SEC, Fortune 100 companies. He serves on selected business and non-profit boards including Manco Inc (Duck, LePage, and Loctite brands), Ancora Mutual Funds, Financial Management Association, the Cleveland Council on World Affairs, and the Financial Executives Research Foundation. The Eastern Finance Association elected Raj Aggarwal as their President, and he has been a Trustee since 1999. In 2002, Raj Aggarwal co-founded the CIO Forum, which is an Invitation only best practices group of large company CIO
s in Northest Ohio with meetings limited to CIOs with no direct reports. Dr. Aggarwal has spoken numerous times on WCPN
and NPR
, including several recent interviews on NPR affiliate, WCPN concerning the financial crisis of 2007–2010. Additionally, he has been considered an authority on Northeast Ohio's business and financial markets. Finally, Raj Aggarwal’s academic leadership is reflected in Hoshino, M., “An Interview with Professor Raj Aggarwal, Department Editor for JIBS”, and his business leadership was reflected in, “The Super CFO: Changing Roles of the CFO”.
and was Dean for three years. While Aggarwal was serving as dean, the College of Business Administration (CBA) received its first ever ranking of their business program in BusinessWeek
, in 2009. Additionally, the CBA received a “Best Graduate Business School” ranking from The Princeton Review
.
of a company is the proportion of its assets financed with other people’s money, also defined as the proportion of its capitalization financed by long-term debt
. Too little debt often means foregoing the tax, monitoring, and other advantages of debt, a less expensive form of capital
compared to equity. However, too much debt can expose a company to a higher than acceptable risk of default or not being able to pay its creditor
s (who can then sue to bankrupt
the company). Trade-offs
like these become more complicated when companies have operations and debt in many countries. Raj Aggarwal has been writing about this topic for many years, and has demonstrated that average levels of debt used by companies differ in various countries in Asia
, Europe
, and Latin America
. Additionally, he has been able to show that this average proportion of corporate debt varies across national borders depending on a number of factors including the level of disclosure timeliness, institutional trading activities, and enforcement of anti-insider trading
laws. Finally, Raj Aggarwal showed that financing activities by the 300 largest banks in the world are determined by the location (Country) of the bank and second by the bank’s size itself.
takes a new meaning when applied to companies operating internationally with many currencies as currency values can change abruptly and unexpectedly. To combat the associated foreign exchange risks, companies have implemented many of the following tactics and strategies; First, multinational companies have to assess at the individual country and consolidated levels three kinds of foreign exchange
exposure for various future time horizon
s, transactions exposure, accounting exposure, and economic exposure. Once a company has these measures, it can develop policies and hedge these various exposures directly by buying or selling offsetting currencies in spot and futures markets or indirectly by making appropriate offsetting operating changes. Additionally, his research focused on countertrade opportunities that allow MNCs to take money out of restricted countries. Raj Aggarwal began writing about these topics when he discussed the importance of FASB 8 within the multinational corporation’s needs.
. While traditional MNCs from the industrialized countries have used brand names and technology to overcome the liability of foreignness when they invest overseas, there is much interest in understanding how the new MNCs from the emerging economies overcome the liability of being foreign when they invest overseas
. Research in this field is important and shows how large companies in emerging markets develop. Especially, how they overcome the liabilities incurred when investing overseas and this research has exposed specific dynamics of these entities Beginning two decades ago, Raj Aggarwal began writing and researching on this topic. His research began by determining the dynamics and characteristics of MNCs in developing nations. He has also modeled the business-government relations during the process of firm nationalization, which accompany the economic development
of several nearly industrialized countries. He has also focused his research on the challenges that Western firms face because of the emergence of multinational corporations from developing countries.
University of Akron College of Business Administration
The University of Akron College of Business Administration is the business school at The University of Akron, located in Akron, Ohio. The CBA has a total enrollment of nearly 2,800 undergraduate students and just under 500 graduate students. There are 65 full-time and 48 part time faculty members...
from 2006 until 2009. He was elected as a Fellow of the Academy of International Business
Academy of International Business
Academy of International Business is the leading association of international business scholars and specialists. Established in 1959, it has over 3000 members in about 72 countries. Membership is open to organizations as well as individuals...
. He has been a Fulbright Research Scholar. He has worked as an engineer, financial analyst, strategic planner, department chair, University budget planner, and corporate board member. He has authored or co-authored over a dozen books or monograph
Monograph
A monograph is a work of writing upon a single subject, usually by a single author.It is often a scholarly essay or learned treatise, and may be released in the manner of a book or journal article. It is by definition a single document that forms a complete text in itself...
s and over a hundred scholarly articles.
Education
Aggarwal received his Bachelor’s degree in Mechanical Engineering from the Indian Institutes of TechnologyIndian Institutes of Technology
The Indian Institutes of Technology are a group of autonomous engineering and technology-oriented institutes of higher education. The IITs are governed by the Institutes of Technology Act, 1961 which has declared them as “institutions of national importance”, and lays down their powers, duties,...
in 1968. He then earned his MBA in Operations Management from Kent State University
Kent State University
Kent State University is a public research university located in Kent, Ohio, United States. The university has eight campuses around the northeast Ohio region with the main campus in Kent being the largest...
in 1970, then studied International Economics at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
from 1972 to 1973. He earned his doctorate in Corporate Finance and International Business at Kent State in 1975. In 2000, he became a Chartered Financial Analyst
Chartered Financial Analyst
The Chartered Financial Analyst Program is a graduate level self-study program offered by the CFA Institute to investment and financial professionals...
(CFA).
Scholarly career
Aggarwal is the finance area editor for the Journal of International Business StudiesJournal of International Business Studies
The Journal of International Business Studies is a double blind peer-reviewed academic journal and the official publication of the Academy of International Business. It is published by Palgrave Macmillan and covers research on international business. The journal was established in 1970 and is...
and was an editor of Financial Education and Practice, a journal published by the Financial Management Association
Financial Management Association
Financial Management Association is an organization for finance and economics students and professionals. Its primary objective is to encourage and recognize academic and professional excellence in the finance field. FMA promotes the study and practice of financial education...
. He has served on editorial boards of scholarly journals in international business and many journals in finance and economics. In a recent issue of the Journal of International Business Studies, Aggarwal was ranked as the most influential scholar in international business literature.
He has held many elected and appointed leadership positions in academia and in business, including; president of the Eastern Finance Association and the Northeast Ohio Financial Executives International. He has been a consultant to the UN, the World Bank, US SEC, Fortune 100 companies. He serves on selected business and non-profit boards including Manco Inc (Duck, LePage, and Loctite brands), Ancora Mutual Funds, Financial Management Association, the Cleveland Council on World Affairs, and the Financial Executives Research Foundation. The Eastern Finance Association elected Raj Aggarwal as their President, and he has been a Trustee since 1999. In 2002, Raj Aggarwal co-founded the CIO Forum, which is an Invitation only best practices group of large company CIO
Chief information officer
Chief information officer , or information technology director, is a job title commonly given to the most senior executive in an enterprise responsible for the information technology and computer systems that support enterprise goals...
s in Northest Ohio with meetings limited to CIOs with no direct reports. Dr. Aggarwal has spoken numerous times on WCPN
WCPN
WCPN — branded 90.3 WCPN — is a public radio station licensed to Cleveland, Ohio, and serving the serving Greater Cleveland area....
and NPR
NPR
NPR, formerly National Public Radio, is a privately and publicly funded non-profit membership media organization that serves as a national syndicator to a network of 900 public radio stations in the United States. NPR was created in 1970, following congressional passage of the Public Broadcasting...
, including several recent interviews on NPR affiliate, WCPN concerning the financial crisis of 2007–2010. Additionally, he has been considered an authority on Northeast Ohio's business and financial markets. Finally, Raj Aggarwal’s academic leadership is reflected in Hoshino, M., “An Interview with Professor Raj Aggarwal, Department Editor for JIBS”, and his business leadership was reflected in, “The Super CFO: Changing Roles of the CFO”.
Academic career
Since 2006, Aggarwal has served as the Frank C. Sullivan Professor of International Business and Finance of the University of Akron College of Business AdministrationUniversity of Akron College of Business Administration
The University of Akron College of Business Administration is the business school at The University of Akron, located in Akron, Ohio. The CBA has a total enrollment of nearly 2,800 undergraduate students and just under 500 graduate students. There are 65 full-time and 48 part time faculty members...
and was Dean for three years. While Aggarwal was serving as dean, the College of Business Administration (CBA) received its first ever ranking of their business program in BusinessWeek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
, in 2009. Additionally, the CBA received a “Best Graduate Business School” ranking from The Princeton Review
The Princeton Review
The Princeton Review is an American-based standardized test preparation and admissions consulting company. The Princeton Review operates in 41 states and 22 countries across the globe. It offers test preparation for standardized aptitude tests such as the SAT and advice regarding college...
.
International Capital Structure
The capital structureCapital structure
In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or 'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80...
of a company is the proportion of its assets financed with other people’s money, also defined as the proportion of its capitalization financed by long-term debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
. Too little debt often means foregoing the tax, monitoring, and other advantages of debt, a less expensive form of capital
Financial capital
Financial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector of the economy based on its operation, i.e. retail, corporate, investment banking, etc....
compared to equity. However, too much debt can expose a company to a higher than acceptable risk of default or not being able to pay its creditor
Creditor
A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...
s (who can then sue to bankrupt
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
the company). Trade-offs
Trade-off theory of capital structure
The Trade-Off Theory of Capital Structure refers to the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The classical version of the hypothesis goes back to Kraus and Litzenberger who considered a balance between the...
like these become more complicated when companies have operations and debt in many countries. Raj Aggarwal has been writing about this topic for many years, and has demonstrated that average levels of debt used by companies differ in various countries in Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
, Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, and Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
. Additionally, he has been able to show that this average proportion of corporate debt varies across national borders depending on a number of factors including the level of disclosure timeliness, institutional trading activities, and enforcement of anti-insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
laws. Finally, Raj Aggarwal showed that financing activities by the 300 largest banks in the world are determined by the location (Country) of the bank and second by the bank’s size itself.
Foreign Financial Risk Management
Financial risk managementFinancial risk management
Financial risk management is the practice of creating economic value in a firm by using financial instruments to manage exposure to risk, particularly credit risk and market risk. Other types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc...
takes a new meaning when applied to companies operating internationally with many currencies as currency values can change abruptly and unexpectedly. To combat the associated foreign exchange risks, companies have implemented many of the following tactics and strategies; First, multinational companies have to assess at the individual country and consolidated levels three kinds of foreign exchange
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
exposure for various future time horizon
Time horizon
A time horizon, also known as a planning horizon, is a fixed point of time in the future at which point certain processes will be evaluated or assumed to end. It is necessary in an accounting, finance or risk management regime to assign such a fixed horizon time so that alternatives can be...
s, transactions exposure, accounting exposure, and economic exposure. Once a company has these measures, it can develop policies and hedge these various exposures directly by buying or selling offsetting currencies in spot and futures markets or indirectly by making appropriate offsetting operating changes. Additionally, his research focused on countertrade opportunities that allow MNCs to take money out of restricted countries. Raj Aggarwal began writing about these topics when he discussed the importance of FASB 8 within the multinational corporation’s needs.
Third World Multinational Corporations
A recent development in the evolution of Multinational Corporations (MNCs) is that they have started originating in emerging marketsEmerging markets
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...
. While traditional MNCs from the industrialized countries have used brand names and technology to overcome the liability of foreignness when they invest overseas, there is much interest in understanding how the new MNCs from the emerging economies overcome the liability of being foreign when they invest overseas
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...
. Research in this field is important and shows how large companies in emerging markets develop. Especially, how they overcome the liabilities incurred when investing overseas and this research has exposed specific dynamics of these entities Beginning two decades ago, Raj Aggarwal began writing and researching on this topic. His research began by determining the dynamics and characteristics of MNCs in developing nations. He has also modeled the business-government relations during the process of firm nationalization, which accompany the economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
of several nearly industrialized countries. He has also focused his research on the challenges that Western firms face because of the emergence of multinational corporations from developing countries.