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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)
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author
and
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
2016-04-01 12:08:38
date last changed
2022-03-28 20:51:06
@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}},
  keywords     = {{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}},
  doi          = {{10.1016/j.ibusrev.2008.09.001}},
  volume       = {{17}},
  year         = {{2008}},
}