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Investors' valuation of global product design and development

Author

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  • K Ojah

    (College of Business & Economics, UAE University, Al-Ain, UAE)

  • L Monplaisir

    (Industrial & Manufacturing Engineering Department, Wayne State University, Detroit, USA)

Abstract

Stock price responses to 170 announcements about global product design and development (GPDD) by NYSE, AMEX, and Nasdaq firms are significantly positive. This indicates that GPDD, which is fast becoming a strategic initiative of choice for multinational firms in the face of globalization and short time-to-market, is value-enhancing. The value enhancement is strong when announcing firms have a high level of information technology/systems infrastructure and a wide geographical spread of operation, and respond aggressively to their peers' strategic initiatives. Further, cross-sectional analyses show that firms' product market structure, their peers' competitive strategy posture, and whether they produce a good or a service, jointly determine the variation of excess returns attributable to global product development. Journal of International Business Studies (2003) 34, 457–472. doi:10.1057/palgrave.jibs.8400049

Suggested Citation

  • K Ojah & L Monplaisir, 2003. "Investors' valuation of global product design and development," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(5), pages 457-472, September.
    • Handle: RePEc:pal:jintbs:v:34:y:2003:i:5:p:457-472
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    Citations

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    Cited by:

    1. Blanchard, Pierre & Gaigné, Carl & Mathieu, Claude, 2012. "Trade costs and international strategy of firms: The role of endogenous product differentiation," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 1023-1036.
    2. Köhler, Christian & Sofka, Wolfgang & Grimpe, Christoph, 2009. "Selectivity in search strategies for innovation: from incremental to radical, from manufacturing to services," ZEW Discussion Papers 09-066, ZEW - Leibniz Centre for European Economic Research.
    3. Sofka, Wolfgang, 2005. "Global Idea Sourcing: An Empirical Investigation into the Mechanisms Behind the Usage of Foreign Business Sources for Innovation," ZEW Discussion Papers 05-53, ZEW - Leibniz Centre for European Economic Research.
    4. Pierre Blanchard & Carl Gaigné & Claude Mathieu, 2010. "The International Strategy of Firms: the Role of Endogenous Product Differentiation," Working Papers SMART 10-02, INRAE UMR SMART.
    5. Kalu Ojah, 2007. "Costs, valuation, and long‐term operating effects of global strategic alliances," Review of Financial Economics, John Wiley & Sons, vol. 16(1), pages 69-90.
    6. Pierre Blanchard & Carl Gaigné & Claude Mathieu, 2012. "Trade Costs and Endogenous Product Differentiation for International Firms," Erudite Working Paper 2012-07, Erudite.
    7. Köhler, Christian & Sofka, Wolfgang & Grimpe, Christoph, 2012. "Selective search, sectoral patterns, and the impact on product innovation performance," Research Policy, Elsevier, vol. 41(8), pages 1344-1356.
    8. Sofka, Wolfgang & Grimpe, Christoph, 2009. "Searching for innovation in market and transition economies: evidence across Europe," ZEW Discussion Papers 09-061, ZEW - Leibniz Centre for European Economic Research.

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