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Stock market reaction to foreign direct investments: Interaction between entry mode and FDI attributes

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  • Cristina López-Duarte

    (University of Oviedo)

  • Esteban García-Canal

    (University of Oviedo)

Abstract

Abstract and Key Results What is the expected reaction regarding the stock price of companies which carry out FDIs (Foreign Direct Investments)? Results from previous research focusing on specific entry modes are inconclusive. The aim of this paper is to test whether the stock market reaction to FDIs is dependent not only on the entry mode that the investing firm may have chosen, but also on the interaction between the entry mode and the other FDIs’ attributes. By focusing on the recent international expansion by means of FDIs of listed Spanish firms, we have found that stock market reaction to FDIs depends upon the interaction between the entry mode and the location of the investment, the identity of the investor and the latter’s international experience.

Suggested Citation

  • Cristina López-Duarte & Esteban García-Canal, 2007. "Stock market reaction to foreign direct investments: Interaction between entry mode and FDI attributes," Management International Review, Springer, vol. 47(3), pages 393-422, June.
    • Handle: RePEc:spr:manint:v:47:y:2007:i:3:d:10.1007_s11575-007-0022-4
    DOI: 10.1007/s11575-007-0022-4
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    1. Mina Glambosky & Kim Gleason & Joan Wiggenhorn, 2011. "Joint ventures between US MNCs and foreign governments," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 7(3), pages 238-258, June.

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