40 Pages Posted: 19 May 2013
Date Written: May 18, 2013
This paper investigates the relationship between US MNCs’ valuations and anti-Americanism in countries where MNCs’ foreign subsidiaries are located. We find that MNCs suffer value-destruction when they enter markets where people express severe anti-Americanism. However, we uncover that geographic diversification into these high anti-Americanism countries significantly increases firm value if the MNC has high levels of intangibles such as technological know-how and marketing expertise. Our findings are consistent with the notion that the advantages from internalizing the cross-border transfer of intangibles are greater when barriers to competition are higher.
Keywords: Global Attitudes, Intangible Assets, Internalization, Multinational Corporation, Geographic Diversification
JEL Classification: F50, F23, G30
Suggested Citation: Suggested Citation
Park, Jung Chul and Sarkar, Dipanwita and Sarkar, Jayanta and Yost, Keven, Business in Troubled Waters: Does Adverse Attitude Affect Firm Value? (May 18, 2013). Journal of Corporate Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2266952