FDI and the Role of Financial Market Quality

Särtryck nr 2011:21

Författare: Jens Forssbaeck och Lars OxelheimÅr: 2011 Publikation: The Future of Foreign Direct Investment and the Multinational Enterprise Redaktör: Ravi Ramamurti and Niron HashaiFörlag: Emerald Group Publishing LtdFörlagsort: Bingley Sidor: 85–109
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In this chapter we analyze the role of financial factors in the underlaking of cross-border acquisitions. We discuss financial firm-specific advantages as drivers of these acquisilions as well as the role of the development of the home financial market in exploiting these advantages. Based on a sample of 1,447 European firms' cross-border acquisitions amounting to a total of
566 acquisitions spanning from 0 to 18 for individual firms, we find strong evidence in favor of a cost-of-equity effect on the occurrence of FDI, whereas the stand-alone effect of debt costs is indeterminate. However, allowing firm-specific financial characteristics to be conditioned by homecountry financial development, both equity costs and debt Costs are found highly significant explanatory factors for cross-border acquisitions undertaken by the sample firms.

Forssbaeck, Jens och Lars Oxelheim (2011), "FDI and the Role of Financial Market Quality". Sid. 85–109 i Ravi Ramamurti and Niron Hashai, red., The Future of Foreign Direct Investment and the Multinational Enterprise. Bingley: Emerald Group Publishing Ltd.

Lars Oxelheim


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