Why investors value multinationality

Mørck, Randall; Yeung, Bernard

doi:10.1016/0167-6687(93)91046-w

Cited by 197 publications

(374 citation statements)

References 24 publications

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“…Not only do MNCs rely less on bonding mechanisms, but there are significant differences in the use of monitoring mechanisms, such as confidential voting rights and poison pill provisions, from DCs. The structural differences documented in these results are consistent with other empirical studies indicating differences between MNCs and DCs on financing Rahman 1997), valuation (Errunza andSenbet 1981, 1984;Morck and Yeung 1991), and acquisitions Morck and Yeung 1992).…”

Section: As Illustrated Insupporting

confidence: 90%

Multinationality, CEO compensation, and corporate governance: some empirical evidence

Lippert

Rahman

1999

Managerial Finance

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Looks at previous research on the differences between multinational corporations (MNCs) and domestic corporations (DCs) and the theories underlying them, relating the ideas to optimal compensation packages for managers. Examines a sample of 724 MNCs and US domestic firms to compare the degree of alignment of their chief executive officer compensation packages and finds that average compensation changes for every $1,000 change in equity value are $33 for DCs and only $12 for MNCs. Analyses further to find out why and suggests that it is due to the higher‐valued investment opportunities of MNCs and differences in their corporate governance structures.

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Section: As Illustrated Insupporting

confidence: 90%

Multinationality, CEO compensation, and corporate governance: some empirical evidence

Lippert

Rahman

1999

Managerial Finance

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“…For the fi rst group, Morck and Yeung (1991) show that a high degree of fi rm-specifi c assets contribute to the gains from international diversifi cation. Related acquisitions are generally predicted to yield higher returns than conglomerate acquisitions (see Markides & Ittner, 1994;Seth et al, 2002), even though this fi nding is discussed controversially.…”

Section: Literature Review and Theoretical Considerationsmentioning

confidence: 98%

Cross‐Border Acquisitions and Shareholder Wealth: Evidence from Spain

Renze-Westendorf¹,

Schiereck²,

Zeidler³

2009

Management Research: Journal of the Iberoamerican Academy of Management

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is an investment manager in the energy sector. He was, until 2008, a research and teaching assistant at the European Business School (EBS) in Oestrich-Winkel, Germany. He fi nalized his Ph.D. dissertation at EBS and received his MBA from Katz School of Management, Pittsburgh. His research interests focus on mergers and acquisitions and on related equity capital market transactions of investment banks.

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“…Therefore, better R&D and marketing capabilities guarantee higher performance within the foreign market. In literature, however, the results are not conclusive (e.g., Morck and Yeung 1991;Kotabe, Srinivasan, and Aulakh 2002;Lu and Beamish 2004;Berry and Sakakibara 2008). Accordingly,…”

Section: Corporate-level Assets and Liability Of Foreignnessmentioning

confidence: 86%

“…Each measure has its own advantages, but financial performance might be the best measure in this context, because market performance and accounting performance measures do not reflect a firm's expected future profits (McWilliams and Siegel 1997). As part of intangible assets (Morck and Yeung 1991), internationalization will improve not only the performance of the firm in the concurrent period, but also the firm's future performance. In addition, growing concerns over stakeholder values make financial performance attractive to researchers (Thomas and Eden 2004;Rugman and Oh 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

Value Creation and Home Region Internationalization of U.S. MNEs

2010

Multinational Business Review

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.Abstract: This study analyzes the relationship between multinationality and performance of 1,247 US multinational enterprises (MNEs) over the period of 1995-2004 by utilizing Tobin's q theory. Internationalization is a double-edged sword: foreign intangible assets create a firm's value, while, at the same time, internationalization itself degrades the value by raising transaction costs and uncertainty in foreign operations. The empirical results show that US MNEs cannot increase their performance merely by developing their intangible assets in the rest of the home region (Canada and Mexico). Conversely, US MNEs rarely suffer from a liability of foreignness in their home region.

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Why investors value multinationality

Cited by 197 publications

References 24 publications

Multinationality, CEO compensation, and corporate governance: some empirical evidence

Multinationality, CEO compensation, and corporate governance: some empirical evidence

Cross‐Border Acquisitions and Shareholder Wealth: Evidence from Spain

Value Creation and Home Region Internationalization of U.S. MNEs

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