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Corporate Reputation, Internalization and the Market Valuation of Multinational Firms

21 Pages Posted: 17 Jul 2003  

Ahmed Riahi-Belkaoui

University of Illinois at Chicago - Department of Accounting

Date Written: May 20, 2003

Abstract

The paper examines the role of reputation to explain the relative market value compared to the accounting value for a multinational firm. The results are consistent with internalization theory in that greater multinationality corresponds to a higher valuation of the firm if corporate reputation id high. However, greater multinationality alone does not correlate positively to a significantly greater value which differs from the tenets of imperfect capital markets theory but correlates negatively to a significantly greater value, which confirms the views of the managerial objectives theory.

Keywords: Corporate reputation, internalization theory, imperfect capital markets theory, managerial objectives theory

JEL Classification: M41, M44

Suggested Citation

Riahi-Belkaoui, Ahmed, Corporate Reputation, Internalization and the Market Valuation of Multinational Firms (May 20, 2003). Available at SSRN: https://ssrn.com/abstract=412005 or http://dx.doi.org/10.2139/ssrn.412005

Ahmed Riahi-Belkaoui (Contact Author)

University of Illinois at Chicago - Department of Accounting ( email )

601 South Morgan Street
University Hall, Room 2303
Chicago, IL 60607
United States
312-996-4400 (Phone)
312-996-4520 (Fax)

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