Browsing by Author "Morck, Randall"

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    Research forum on international economics : international an event study
    (2022) Morck, Randall; Yeung, Bernard
    The internalization theory of multinational firms proposes that direct international investment occurs when firm has information related intangible assets with public good properties. We find that firms with characteristics suggesting the presences of information based assets experiences a significantly positive stock prices reaction upon announcing a foreign acquisition. on the other hand firms apparently lacking such assets experience at best zoro abnormal returns upon announcing overseas acquisitions.
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    Why investors value multinationality
    (Institute of Public Policy studies , Michigan, 1991-04) Morck, Randall; Yeung, Bernard
    We examine the value of multinationality to investors as reflected in firms q ratios. The positive impact of R&D and advertising spending on a firms q is enhanced by multinationality, but multinationality itself has no significant impact. This supports the internalization theory which holds that intangible assets are necessary to justify direct foreign investment: and thus a recent strand of trade literature which assumes that multinational firms have intangible assets with public good properties. Our results do not support the hypothesis that investors value multinational firms as a means of diversifying their portfolios internationality.