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Do Multinational Operations Influence Firm Value? Evidence from the Triad Regions

Author

Listed:
  • Brett Olsen

    (College of Business, University of Missouri at Columbia, U.S.A.)

  • B. Elango

    (College of Business, Illinois State University, U.S.A.)

Abstract

This paper examines the effect of multinational operations on firm value using a sample of firms from the three triad regions of the world. Using the Transnational Index (reported by the United Nations), a newer measure of multinational operations, this study helps explain some of the conflicting findings reported in the literature and highlights the importance of location of the firm as a factor in influencing the premium or discount in firm value due to multinational operations.

Suggested Citation

  • Brett Olsen & B. Elango, 2005. "Do Multinational Operations Influence Firm Value? Evidence from the Triad Regions," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 4(1), pages 11-29, April.
    • Handle: RePEc:ijb:journl:v:4:y:2005:i:1:p:11-29
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    References listed on IDEAS

    as
    1. Fatemi, Ali M, 1984. "Shareholder Benefits from Corporate International Diversification," Journal of Finance, American Finance Association, vol. 39(5), pages 1325-1344, December.
    2. Daniel Sullivan, 1994. "Measuring the Degree of Internationalization of a Firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 325-342, June.
    3. Bae, Sung C. & Noh, Seungwook, 2001. "Multinational corporations versus domestic corporations: a comparative study of R&D investment activities," Journal of Multinational Financial Management, Elsevier, vol. 11(1), pages 89-104, February.
    4. Christos Pantzalis, 2001. "Does Location Matter? An Empirical Analysis of Geographic Scope and MNC Market Valuation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(1), pages 133-155, March.
    5. Lang, Larry H P & Stulz, Rene M, 1994. "Tobin's q, Corporate Diversification, and Firm Performance," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1248-1280, December.
    6. Branch, Ben, 1974. "Research and Development Activity and Profitability: A Distributed Lag Analysis," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 999-1011, Sept./Oct.
    7. John H Dunning, 1980. "Towards an Eclectic Theory of International Production: Some Empirical Tests," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 11(1), pages 9-31, March.
    8. Christophe, Stephen E & Pfeiffer, Ray J, Jr, 2002. "The Valuation of MNC International Operations during the 1990s," Review of Quantitative Finance and Accounting, Springer, vol. 18(2), pages 119-138, March.
    9. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 365-379, June.
    10. Ike Mathur & Kyran Hanagan, 1983. "Are Multinational Corporations Superior Investment Vehicles for Achieving International Diversification?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 14(3), pages 135-146, September.
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    Cited by:

    1. Giovanni Garegnani & Emilia Merlotti & Angeloantonio Russo, 2015. "Scoring Firms’ Codes of Ethics: An Explorative Study of Quality Drivers," Journal of Business Ethics, Springer, vol. 126(4), pages 541-557, February.
    2. Balasubramanian Elango & S. Prakash Sethi, 2007. "An exploration of the relationship between country of origin (COE) and the internationalization-performance paradigm," Management International Review, Springer, vol. 47(3), pages 369-392, June.

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    More about this item

    Keywords

    multinational operations; firm value; transnational index;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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