Advanced

Finance-specific factors as drivers of cross-border investment - An empirical investigation

Forssbaeck, Jens LU and Oxelheim, Lars LU (2008) In International Business Review 17(6). p.630-641
Abstract
In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms' international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms' FDI decisions cannot be properly... (More)
In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms' international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms' FDI decisions cannot be properly understood. (C) 2008 Elsevier Ltd. All rights reserved. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
OLI, Cost of capital, Financial variables, Cross-border acquisitions, FDI, Financial strategy, LISTINGS
in
International Business Review
volume
17
issue
6
pages
630 - 641
publisher
Elsevier
external identifiers
  • wos:000262076900002
  • scopus:56949104566
ISSN
1873-6149
DOI
10.1016/j.ibusrev.2008.09.001
language
English
LU publication?
yes
id
d9b67f90-2c75-480e-bf7f-fddefc4cb787 (old id 1415722)
date added to LUP
2009-06-10 14:11:12
date last changed
2017-05-21 03:38:44
@article{d9b67f90-2c75-480e-bf7f-fddefc4cb787,
  abstract     = {In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms' international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms' FDI decisions cannot be properly understood. (C) 2008 Elsevier Ltd. All rights reserved.},
  author       = {Forssbaeck, Jens and Oxelheim, Lars},
  issn         = {1873-6149},
  keyword      = {OLI,Cost of capital,Financial variables,Cross-border acquisitions,FDI,Financial strategy,LISTINGS},
  language     = {eng},
  number       = {6},
  pages        = {630--641},
  publisher    = {Elsevier},
  series       = {International Business Review},
  title        = {Finance-specific factors as drivers of cross-border investment - An empirical investigation},
  url          = {http://dx.doi.org/10.1016/j.ibusrev.2008.09.001},
  volume       = {17},
  year         = {2008},
}