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Corporate governance in the multinational enterprise: A financial contracting perspective

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  • Dietrich, Diemo
  • Jindra, Björn

Abstract

The aim of this paper is to bring economics-based finance research more into the focus of international business theory. On the basis of an analytical model that introduces financial constraints into incomplete contracting in an international vertical trade relationship, we propose an integrated framework that facilitates the study of the interdependencies between internalisation decisions, firm-internal allocations of control rights, and the debt capacity of firms. We argue that the financial constraint of an MNE and/or its supplier should be considered as an important determinant of internal governance structures, complementary to, and interacting with, institutional factors and proprietary knowledge.

Suggested Citation

  • Dietrich, Diemo & Jindra, Björn, 2010. "Corporate governance in the multinational enterprise: A financial contracting perspective," International Business Review, Elsevier, vol. 19(5), pages 446-456, October.
  • Handle: RePEc:eee:iburev:v:19:y:2010:i:5:p:446-456
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    References listed on IDEAS

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    Cited by:

    1. Diemo Dietrich & Tobias Knedlik & Axel Lindner, 2011. "Central and Eastern European countries in the global financial crisis: a typical twin crisis?," Post-Communist Economies, Taylor & Francis Journals, vol. 23(4), pages 415-432, April.
    2. repec:rss:jnljfe:v3i1p4 is not listed on IDEAS
    3. Hearn, Bruce & Piesse, Jenifer & Strange, Roger, 2012. "Islamic finance and market segmentation: Implications for the cost of capital," International Business Review, Elsevier, vol. 21(1), pages 102-113.
    4. Dam, Lammertjan & Scholtens, Bert, 2012. "The curse of the haven: The impact of multinational enterprise on environmental regulation," Ecological Economics, Elsevier, vol. 78(C), pages 148-156.

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