Business in Troubled Waters: Does Adverse Attitude Affect Firm Value?

40 Pages Posted: 19 May 2013  

Jung Chul Park

University of South Florida

Dipanwita Sarkar

Queensland University of Technology; Financial Research Network (FIRN)

Jayanta Sarkar

Queensland University of Technology

Keven Yost

Auburn University - Department of Finance

Date Written: May 18, 2013

Abstract

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

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

Jung Chul Park

University of South Florida ( email )

Tampa, FL 33620
United States
813-974-9680 (Phone)
813-974-3084 (Fax)

HOME PAGE: http://www.usf.edu/business/contacts/park-jung-chul.aspx

Dipanwita Sarkar

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia
61731385391 (Phone)

HOME PAGE: http://staff.qut.edu.au/staff/sarkard/

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Jayanta Sarkar

Queensland University of Technology ( email )

School of Economics and Finance
Gardens Point; Block Z, Level 8
Brisbane, Queensland 4000
Australia
61-7-31384252 (Phone)

HOME PAGE: http://staff.qut.edu.au/staff/sarkarj/

Keven Yost (Contact Author)

Auburn University - Department of Finance ( email )

303 Lowder Hall
Auburn, AL 36849
United States
334-844-5303 (Phone)
334-844-4960 (Fax)

HOME PAGE: http://www.business.auburn.edu/~yostkev/

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