Why Investors Value Multinationality
AbstractThe authors examine the value of multinationality to investors as reflected in firms' q ratios. The positive impact of research and development and advertising spending on a firm's q is enhanced by multinationality, but multinationality itself has no significant impact. This supports the internalization theory's prediction that intangible assets are necessary to justify direct foreign investment and, thus, a recent strand of trade literature that assumes multinational firms have intangible assets with public good properties. The authors' results do not support the hypothesis that investors value multinational firms as a means of diversifying their portfolios internationally. Copyright 1991 by University of Chicago Press.
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Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 282.
Length: 45 pages
Date of creation: 1991
Date of revision:
investments ; enterprises ; research and development ; trade;
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