IDEAS home Printed from https://ideas.repec.org/a/pal/jintbs/v13y1982i3p19-42.html
   My bibliography  Save this article

Comparative Analysis of the Foreign Investment Evaluation Practices by U.S.-Based Manufacturing Multinational Companies

Author

Listed:
  • Marie E Wicks Kelly

    (McKinsey and Company)

  • George C Philippatos

    (The University of Tennessee)

Abstract

A large sample of U.S.-based manufacturing multinational companies were surveyed regarding their investment valuation practices. It was found that: (a) Foreign Direct Manufacturing Investment (FDMI) is motivated primarily by profit rather than the recently proposed behavioral considerations; (b) the majority of companies practice project-by-project analysis of the simple accept/reject type, rather than the comparative project analysis advocated by financial analysts; (c) most of the companies utilized criteria for single investments, cash-flows, and cost of capital that were in general agreement with the analytical literature; (d) companies were concerned more with business risk than currency and political risks—moreover, all three types of risk were evaluated subjectively and accounted through adjustments in the required rates of return rather than the cash flows of the FDMI, as specified in financial research; (e) analysis of demographic and behavioral variables for possible relationships to FDMI evaluation practices yielded interesting but variable specific results. The questionnaires were mailed in May 1979 and the personal interviews were conducted during December 1979 and the first six months of 1980.© 1982 JIBS. Journal of International Business Studies (1982) 13, 19–42

Suggested Citation

  • Marie E Wicks Kelly & George C Philippatos, 1982. "Comparative Analysis of the Foreign Investment Evaluation Practices by U.S.-Based Manufacturing Multinational Companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 13(3), pages 19-42, September.
    • Handle: RePEc:pal:jintbs:v:13:y:1982:i:3:p:19-42
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jibs/journal/v13/n3/pdf/8490556a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/jibs/journal/v13/n3/full/8490556a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gregory Clare & Ira N. Gang, 2010. "Exchange Rate and Political Risks, Again," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(3), pages 46-58, May.
    2. Larimo, Jorma, 1995. "The foreign direct investment decision process: Case studies of different types of decision processes in finnish firms," Journal of Business Research, Elsevier, vol. 33(1), pages 25-55, May.
    3. Tuan, Chyau & Ng, Linda Fung-Yee, 1995. "Hong Kong's outward investment and regional economic integration with guandong: Process and implications," Journal of Asian Economics, Elsevier, vol. 6(3), pages 385-405.
    4. Shao, Lawrence Peter, 1997. "Capital structure norms among foreign subsidiaries of U.S. multinational enterprises," Global Finance Journal, Elsevier, vol. 8(1), pages 145-157.
    5. Adrian Buckley & Peter Buckley & Pascal Langevin & Ka Lun Tse, 1996. "The financial analysis of foreign investment decisions by large UK-based companies," The European Journal of Finance, Taylor & Francis Journals, vol. 2(2), pages 181-206.
    6. Buckley, Adrian & Eijgenhuijsen, Hans, 1997. "A conceptual framework for evaluating foreign investments," Serie Research Memoranda 0008, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    7. Puhr, Harald & Müllner, Jakob, 2024. "Vox populi, vox dei: A concept and measure for grassroots socio-political risk using Google Trends," Journal of International Management, Elsevier, vol. 30(2).
    8. Siziba, Simiso & Hall, John Henry, 2021. "The evolution of the application of capital budgeting techniques in enterprises," Global Finance Journal, Elsevier, vol. 47(C).
    9. Peter Markovič & Michal Šinský, 2009. "Trends in application of capital budgeting methods for investment projects evaluation," Ekonomika a Management, Prague University of Economics and Business, vol. 2009(1).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:13:y:1982:i:3:p:19-42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.