scholarly journals The impact of investment diversification on firms’ performance: A comparison of domestic and multinational firms operating in Pakistan

Paradigms ◽  
2017 ◽  
Vol 11 (1) ◽  
pp. 26-33
Author(s):  
Said Shah ◽  
◽  
Safdar Tahir ◽  
Jamil Anwar ◽  
◽  
...  
Keyword(s):  
Multinational Firms ◽  
The Impact

scholarly journals Substitution across profit shifting methods and the impact on thin capitalization rules

2021 ◽  
Author(s):  
Gideon Goerdt ◽  
Wolfgang Eggert
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Multinational Firm ◽  
Profit Shifting ◽  
Goods And Services ◽  
Internal Goods ◽  
Transfer Prices ◽  
Debt Shifting ◽  
The Impact ◽  
Thin Capitalization

AbstractThin capitalization rules limit firms’ ability to deduct internal interest payments from taxable income, thereby restricting debt shifting activities of multinational firms. Since multinational firms can limit their tax liability in several ways, regulation of debt shifting may have an impact on other profit shifting methods. We therefore provide a model in which a multinational firm can shift profits out of a host country by issuing internal debt from an entity located in a tax haven and by manipulating transfer prices on internal goods and services. The focus of this paper is the analysis of regulatory incentives, $$(i)$$ ( i ) if a multinational firm treats debt shifting and transfer pricing as substitutes or $$(ii)$$ ( i i ) if the methods are not directly connected. The results provide a new aspect for why hybrid thin capitalization rules are used. Our discussion in this paper explains why hybrid rules can result in improvements in welfare if multinational firms treat methods of profit shifting as substitutes.

The impact of within-country and within-firm factors on Japanese foreign subsidiary performance during economic crisis

2017 ◽  
Vol 9 (3) ◽  
pp. 190-205 ◽  
Author(s):  
Matheus Baldo Cordeiro ◽  
Mario Henrique Ogasavara ◽  
Gilmar Masiero
Keyword(s):  
Economic Crisis ◽  
Fixed Effects ◽  
Multinational Firms ◽  
Negative Impact ◽  
Foreign Subsidiaries ◽  
Productivity Measurement ◽  
Subsidiary Performance ◽  
Content Type ◽  
Subsidiary Management ◽  
The Impact

Purpose The purpose of this paper is to analyze the relevant aspects that influence foreign subsidiary’s performance and remain how they retain competitiveness in international markets during economic crisis. To investigate this effect, this research analyzes the behavior of Japanese subsidiaries located in European countries during the pre- and post-crisis periods that started in the USA in 2008 and spread all over the world. Design/methodology/approach This is a quantitative study with an analysis based on longitudinal data of foreign subsidiaries of Japanese multinational firms during the period 2006-2013. It applies a multiple linear regression with panel data using fixed effects models. Findings The findings show that within-firm factors related to local experiential knowledge, market entry through joint ventures with partners from the same nationality, and subsidiary management with a team of expatriates all have a positive impact on subsidiary performance during times of economic crisis. Moreover, within-country factors involving macroeconomic aspects related to inflation rate and population income indicators show a negative impact on performance. Finally, the results confirm that subsidiary performance is higher in the pre-crisis period, showing the importance of considering economic crisis aspects in longitudinal studies. Practical implications The result has implications for managers of multinational firms to understand which factors most impact the success of their foreign subsidiaries during times of economic crisis. In this way, managers can, with greater confidence, decide to reach the most important performance indicator in subsidiary management. Originality/value The majority of studies on economic crisis is based on an economic perspective and mostly investigates Asian and Argentinean crises. When considering a firm-level perspective, most research studies conducted on a subsidiary level are cross-sectional or use survival as a measure of performance. This paper applies a longitudinal study using subsidiary-level data and analyzes performance by sales and productivity measurement. In addition, it investigates whether or not within-country and within-firm factors impacted subsidiary performance during the 2008 economic crisis.

Performance of Mid-Size Internationalized Indian Firms: Evaluating the Role of Family Control

2019 ◽  
Vol 9 (12) ◽  
pp. 387-400
Author(s):  
Faisal M Ahsan ◽  
Ajay Singal
Keyword(s):  
Multinational Firms ◽  
International Expansion ◽  
Negative Effects ◽  
Family Control ◽  
Listed Firms ◽  
And Performance ◽  
Performance Heterogeneity ◽  
The Impact ◽  
Degree Of Internationalization

The rapidly growing and gradual emergence of multinational firms from the Indian sub-continent now calls for thorough re-understandings of extant theories and existing ideologies of the ‘internationalization’ process. We would initially assess the three-stage model of internationalization in the context of mid-size Indian firms and intend to investigate the relationship between performance and degree of internationalization. Based on the longitudinal dataset (2005-12) of publicly listed firms, our findings suggested that mid-size firms remained stuck up in the first stage of internationalization and accordingly exhibit a downward-sloping relationship between internationalization’s degree and performance. Most of the mid-size firms continued to show a predominantly family-controlled stance, and the impact of family ownership shows negative effects on the degree of internationalization. By examining the performance heterogeneity in family-owned firms towards internationalization, this paper enriches the existing body of research and assume it to be a prolific addition in the literature on international expansion.

Does location matter in determining firms’ performance? A comparative analysis of domestic and multinational companies

2018 ◽  
Vol 12 (3) ◽  
pp. 253-272 ◽  
Author(s):  
Said Shah ◽  
Jamil Anwar ◽  
SAF Hasnu
Keyword(s):  
Multinational Firms ◽  
Stock Exchange ◽  
National Level ◽  
Secondary Data ◽  
Bench Mark ◽  
Corporate Planning ◽  
Content Type ◽  
Corporate Strategies ◽  
Cash Conversion Cycle ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of internationalization of investment on corporate policies through multinational firms (MNFs) and thereby variation in financial performances when compared to domestic firms (DFs) using 10 years’ (2004-2013) secondary data of 153 firms listed on Pakistan Stock Exchange. Design/methodology/approach This study applies regression and ratio analyses for testing of hypotheses and other statistics. Findings The results indicate that the performance of MNFs is better than that of DFs primarily because of internationalization of investments and inventory utilization. The rest of the factors included in the model, namely, cash conversion cycle and corporate governance (CG) indices, have less prominent role in determining firms’ performance. Research limitations/implications Sample size was restricted to 153 firms, as complete data for the period selected to carry out the study were available only for these firms. For determining the quality of CG, only sample average has been used as bench mark due to non-availability of industrial average. Practical implications The recommendations of the research can be used by economic planners and corporate experts as policy guidelines and bench mark for improving the corporate and economic performance of the country. Besides, these recommendations are beneficial for emerging economies particularly and developed economies generally across the globe. Social implications Economic and financial regulators can get guidance from the findings of the study to adjust national-level corporate planning. For example, State Bank of Pakistan (the central bank of the country) can amend its prudential regulations with regard to maintaining liquidity by corporate units according to the results of the study. Corporate units can directly get guidance and adopt the findings of the study in their corporate planning to improve their performance. The findings and methodology of the research can also be used by research students on further exploring the field. Originality/value Splitting the sample into domestic and multinationals firms, separately and jointly analyzing these firms and then comparing corporate strategies of these firms based on location are unique.

The Impact of National Culture on Information Systems Planning Autonomy

2010 ◽  
Vol 18 (3) ◽  
pp. 1-34 ◽  
Author(s):  
Dinesh A. Mirchandani ◽  
Albert L. Lederer
Keyword(s):  
Information Systems ◽  
National Culture ◽  
Structural Equation ◽  
Multinational Firms ◽  
Postal Survey ◽  
Equation Modeling ◽  
Systems Planning ◽  
Culture Model ◽  
The Impact ◽  
Information Systems Planning

Hofstede’s national culture model has been applied in prior research to better understand the management of multinational firms. That research suggests that national culture may influence the information systems planning autonomy of the subsidiaries of multinational firms, but such an impact has not yet been tested empirically. A postal survey of 131 chief information officers and 103 senior non-IS managers of U.S. subsidiaries of such firms collected data to test hypotheses based on the model. Structural equation modeling using PLS-Graph 3.0 revealed that Individualism-Collectivism, Masculinity-Femininity, and Uncertainty Avoidance predicted autonomy for particular IS planning phases (as rated by the CIOs). On the basis of the supported hypotheses, the study provides evidence of the relevance of the national culture model to IS planning effectiveness and IS contribution. The study also suggests to subsidiary managers that an understanding of the national culture of their parent firm can help them gain an insight into the parent’s management perspective.

scholarly journals International diversification and firm’s value: evidence from developing nations

2016 ◽  
Vol 26 (2) ◽  
pp. 166-183 ◽  
Author(s):  
A.N. Bany-Ariffin ◽  
Bolaji Tunde Matemilola ◽  
Liza Wahid ◽  
Siti Abdullah
Keyword(s):  
Financial Performance ◽  
Multinational Corporations ◽  
Multinational Firms ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
International Diversification ◽  
Technological Advancement ◽  
Reverse Causality ◽  
Content Type ◽  
The Impact

Purpose This paper aims to evaluate the impact of international diversification, through the investment abroad activities of the Malaysian multinational corporations (MNCs), on their financial performance. Design/methodology/approach The paper applies the panel generalized method of moments (GMM) estimation technique that gives better results. Findings The empirical findings show that the move to invest abroad has brought a positive impact on Malaysian MNCs’ financial performance. However, in terms of a firm’s risk, the results contradict the general internationalization-risk hypothesis. Research limitations/implications The study focuses on the top 100 multinational firms; future researchers may extend the time period and use the entire sample of all the multinational firms. Practical implications Foreign investments offer rewarding returns due to cheaper labour and raw materials, competitive edge in terms of technological advancement and larger market opportunities. Originality/value The paper contributes to the literature using the panel GMM’s estimation that effectively control for reverse causality and serial correlation problem. The paper also contributes to the international diversification and performance relationship, in a fast-growing Malaysia.

scholarly journals Multinational Firms and International Business Cycle Transmission*

2016 ◽  
Vol 132 (2) ◽  
pp. 921-962 ◽  
Author(s):  
Javier Cravino ◽  
Andrei A. Levchenko
Keyword(s):  
Business Cycle ◽  
International Business ◽  
Multinational Firms ◽  
Quantitative Model ◽  
Individual Country ◽  
Firm Level ◽  
Data Set ◽  
International Business Cycle ◽  
The Impact ◽  
Foreign Shocks

Abstract We investigate how multinational firms contribute to the transmission of shocks across countries using a large multicountry firm-level data set that contains cross-border ownership information. We use these data to document two novel empirical patterns. First, foreign affiliate and headquarter sales exhibit strong positive comovement: a 10% growth in the sales of the headquarter is associated with a 2% growth in the sales of the affiliate. Second, shocks to the source country account for a significant fraction of the variation in sales growth at the source-destination level. We propose a parsimonious quantitative model to interpret these findings and to evaluate the role of multinational firms for international business cycle transmission. For the typical country, the impact of foreign shocks transmitted by all foreign multinationals combined is non-negligible, accounting for about 10% of aggregate productivity shocks. On the other hand, since bilateral multinational production shares are small, interdependence between most individual country pairs is minimal. Our results do reveal substantial heterogeneity in the strength of this mechanism, with the most integrated countries significantly more affected by foreign shocks.

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