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The home country in the age of globalization: how much does it matter for firm performance?

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  • Gabriel Hawawini
  • Venkata Subban Subramanian
  • Paul Verdin

Abstract

The globalization process has created considerable speculation on the impact of the home country environment to a firm's competitive advantage in international markets. Using a random effects model that is partly induced from the concept of comparative advantage and partly following the descriptive modeling of performance determinants, this paper explores the quantitative impact of home country environment on the performance for firms across 6 countries. The paper uses two value-based, i.e. risk adjusted and cash-flow based, measures of firm performance. The results indicate that the importance of country factors is low and firm-specific factors dominate performance across and within countries. The results also show that global industry effects are increasingly more important than country effects. © 2003 Elsevier Inc. All rights reserved.

Suggested Citation

  • Gabriel Hawawini & Venkata Subban Subramanian & Paul Verdin, 2004. "The home country in the age of globalization: how much does it matter for firm performance?," ULB Institutional Repository 2013/14190, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/14190
    Note: SCOPUS: ar.j
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