Competitive Performance and International Capital Mobility: Hypothesis of Potential Endogenous and Exogenous Competitive Advantages of Firms

Posted: 1 Mar 2005

See all articles by Alfredo Martínez Bobillo

Alfredo Martínez Bobillo

University of Valladolid

Ilduara Busta

Copenhagen Business School

Félix J. López-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting; National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy

Fernando Tejerina Gaite

University of Valladolid

Date Written: February 25, 2005

Abstract

The endogenous and exogenous competitive advantages of firms across different phases of foreign direct investment depend on the resources used by industries for their financial development and growth. These advantages, as well as the influence of internal owners, facilitate the access of firms to foreign financial markets. This study attempts to clarify the relationship between those financial goals and firm's advantages, as well as to analyze the relationship between the degree of international diversification (hereinafter DOI) and firm value in Germany, France, the U.K., Spain or Denmark. Our results support a curvilinear relationship between DOI and firm performance that is articulated in three stages in the presence of industry reputation, technological, distribution and financial systems barriers and also showing high transaction cost economics. These findings point to a cyclic process in the firm's international financial and geographical expansion, where overcoming such barriers and developing governance and coordination mechanisms to minimize transaction cost economics becomes the main challenge of the firm in order to compete with a dynamic capital mobility at the worldwide level.

Keywords: firm performance, international diversification, competitive advantages, ownership

JEL Classification: F21, F30

Suggested Citation

Martínez Bobillo, Alfredo and Busta, Ilduara and Lopez-Iturriaga, Felix Javier and Tejerina Gaite, Fernando, Competitive Performance and International Capital Mobility: Hypothesis of Potential Endogenous and Exogenous Competitive Advantages of Firms (February 25, 2005). Available at SSRN: https://ssrn.com/abstract=672102 or http://dx.doi.org/10.2139/ssrn.672102

Alfredo Martínez Bobillo (Contact Author)

University of Valladolid ( email )

8 C/Plaza de Santa Cruz
47002 Valladolid, Valladolid 47002
Spain

Ilduara Busta

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Felix Javier Lopez-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting ( email )

Avda. Valle Esgueva 6
47011 Valladolid
Spain
+34 983 184 395 (Phone)
+34 983 183830 (Fax)

HOME PAGE: http://www2.eco.uva.es/flopez

National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy ( email )

Lebedeva,27
Perm, Perm 614070
Russia

Fernando Tejerina Gaite

University of Valladolid ( email )

8 C/Plaza de Santa Cruz
47002 Valladolid, Valladolid 47002
Spain

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