The Effects of International Operations on the Market Value of the Firm: Theory and Evidence

Errunza, Vihang R.; Senbet, Lemma W.

doi:10.1111/j.1540-6261.1981.tb00455.x

Cited by 287 publications

(143 citation statements)

References 9 publications

Supporting

Mentioning

125

Contrasting

Unclassified

Order By: Relevance

“…In addition to the initial investment, the costs include higher coordination and management expenses over geographical and cultural distances, enforcement of contracts, protection of patents, and the risks associated with foreign exchange, taxation, and political factors. The many possible patterns of firm-level internationalisation imply alternative combinations of benefits and costs, and following the early work of Errunza & Senbet (1981, 1984, an extensive empirical literature has sought to identify and measure them. The issue, however, remains unsettled.…”

Section: Previous Related Researchmentioning

confidence: 99%

Firm-level internationalisation and the home bias puzzle

Berrill

Kearney

2010

Journal of Economics and Business

View full text Add to dashboard Cite

The extent to which internationalising MNEs create value, and the extent to which investors can reap the benefits of firm-level internationalisation remain controversial issues. Using a multi-country dataset with over 3 million observations, we classify 1,143 firms listed on the exchanges of the G7 countries according to the geographical spread of their sales and subsidiaries. We show that more internationalised firms provide greater diversification benefits. By investing in home-based internationalised firms, investors can 'free ride' the costs and risks associated with internationalisation at the level of the firm and exhibit home bias while availing of international diversification benefits.

show abstract

Section: Previous Related Researchmentioning

confidence: 99%

Firm-level internationalisation and the home bias puzzle

Berrill

Kearney

2010

Journal of Economics and Business

View full text Add to dashboard Cite

show abstract

“…Several theories can explain the rapid growth of cross-border acquisitions by the Dutch firms during the past decade. According to theories of foreign direct investments, which are also related to the internalizing theory, imperfections in factor, product and capital market are the principal motives for international investments (Caves, 1971;Hymer, 1976;Errunza and Senbet, 1981). Dutch firms may decide to invest abroad to take advantage of the mispriced factors of production, cope with trade barriers, especially in the East European and former Soviet Union countries that have been opening up during the past decade.…”

Section: Introductionmentioning

confidence: 99%

International acquisitions and shareholder wealth Evidence from the Netherlands

Corhay

Rad

2000

International Review of Financial Analysis

View full text Add to dashboard Cite

In this article, we test wealth effects of international acquisitions using a sample of foreign acquisitions by Dutch firms during the period 1990-96. We find weak evidence that cross-border acquisitions are wealth-creating corporate activities, especially for acquisitions in the U.S. We observe further that for the West European acquisitions, benefits from internalization are larger for companies having relatively less international exposure and making acquisitions outside of their main activities.

show abstract

“…Irrespective of empirical research advocating a positive relationship between the degree of international involvement and excess market value in general (Errunza, 1980), the location of the respective business activity is universally perceived to be decisive. Table 1 summarizes the four overarching modalities of FDI as well as the respective variables which influence the locational choice of FDI destination according to Dunning (1998).…”

Section: Globalization Induced New Forms Of Tradementioning

confidence: 99%

The Legacy of Conventional Textbook Trade Theory in the Light of Globalization

Nagel¹,

Burnete²

2018

JMAA

View full text Add to dashboard Cite

The term "globalization" designates the rapidly advancing international economic integration through substantial growth in trade of goods and services as well as surging cross-border factor mobility from the early 1990s onwards.This acceleration in the liberalization of world trade and capital movements is largely attributable to technological progress which significantly curtailed the expenses for transport as well as communication. In conjunction with the progressing opening of major newly industrializing economies endowed with abundant and cheap labor forces, it has reinforced a geographical fragmentation of production processes according to cost considerations. This phenomenon termed as "vertical specialization", "outsourcing" or also "slicing the value chain" in turn has translated into a hike in FDI and international trade of intermediate products. The main objective of this paper is to identify adequate trade models for assessing the corresponding effects of those developments. In this context, textbook trade theories spanning from comparative advantage à la Ricardo to the new-new trade theory are examined. Subsequently, we expand on globalization-induced new forms of trade (intra-firm trade, trade within the value chain) and finally conclude with our findings to properly account for those trends.

show abstract

The Effects of International Operations on the Market Value of the Firm: Theory and Evidence

Abstract: tion of the Japanese nationals w a s normal t o t h e i r s t a t u s as expatriates i n a foreign country. However , the hypothesized difference could be discerned between the Americans and t h e Japanese-Americans .

Cited by 287 publications

References 9 publications

Firm-level internationalisation and the home bias puzzle

Firm-level internationalisation and the home bias puzzle

International acquisitions and shareholder wealth Evidence from the Netherlands

The Legacy of Conventional Textbook Trade Theory in the Light of Globalization

Contact Info

Product

Resources

About