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Capital investment, internationalization, and firm performance: Evidence from Southeast Asian countries

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  • Vithessonthi, Chaiporn

Abstract

This study asks whether firms that invest more have higher degrees of internationalization and whether firms with higher degrees of internationalization perform better than those with lower degrees of internationalization. Using a large panel sample that consists of non-financial firms in five countries in the Southeast Asia region during the period 1990–2014, I show that capital investment negatively affects the level of internationalization but has a positive effect on foreign sales growth. The negative effect of capital investment on internationalization levels is weaker for firms with higher degrees of internationalization. The level of internationalization is not associated with firm performance, measured as return on assets; however, there is some evidence for the positive relation between the level of internationalization and firm performance, measured as the stock return.

Suggested Citation

  • Vithessonthi, Chaiporn, 2016. "Capital investment, internationalization, and firm performance: Evidence from Southeast Asian countries," Research in International Business and Finance, Elsevier, vol. 38(C), pages 393-403.
    • Handle: RePEc:eee:riibaf:v:38:y:2016:i:c:p:393-403
    DOI: 10.1016/j.ribaf.2016.04.019
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    Cited by:

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    More about this item

    Keywords

    Corporate investment; Firm performance; Foreign assets; Foreign sales; Internationalization;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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