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Ownership Concentration, Location, and Internalization Advantage in Financial Performance

Author

Listed:
  • Fang-Yi LO

    (Department of International Business, Feng Chia University, Taichung, Taiwan.)

  • Shih-Kuan CHIU

    (Department of International Business, Feng Chia University, Taichung, Taiwan.)

  • Pei-Wen SHIH

    (Department of International Business, Feng Chia University, Taichung, Taiwan.)

Abstract

Taiwan maintains close economic cooperation with the Southeast Asian countries through trade, investment, and industrial advancement. This paper focuses on multinational enterprises in the Taiwanese electronic industry that invested in Southeast Asia from 1997 to 2009. Regression results show that ownership concentration, location, and internalized advantage have various effects on firm financial performance. Performance indicators reveal that ownership concentration has a positive effect on return on equity and return on invested capital, and location has a positive effect on Tobin’s q, whereas internalization advantage is significant for each of them but with less explanation power. Ownership concentration exhibits the greatest explanation power of financial performance. To explore the host country effect, this paper also decomposes the country samples and indicates the theoretical and managerial implications of the research findings.

Suggested Citation

  • Fang-Yi LO & Shih-Kuan CHIU & Pei-Wen SHIH, 2016. "Ownership Concentration, Location, and Internalization Advantage in Financial Performance," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 82-93, September.
    • Handle: RePEc:rjr:romjef:v::y:2016:i:3:p:82-93
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    References listed on IDEAS

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    More about this item

    Keywords

    ownership; location; internalization; advantage; Southeast Asia; financial performance;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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