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|Title:||Investor Response to Environmental Risk in Foreign Direct Investment|
Foreign direct investment
|Citation:||Goerzen, A., Sapp, S., Delios, A. (2010). Investor Response to Environmental Risk in Foreign Direct Investment. Management International Review 50 (6) : 683-708. ScholarBank@NUS Repository. https://doi.org/10.1007/s11575-010-0058-8|
|Abstract:||•The theory of internalization suggests that proprietary assets-usually in the form of advertising and/or marketing capabilities-are the key to understanding a firm's ability to create value in foreign markets. We show that the capacity of a multinational corporation (MNC) to create value in a foreign direct investment (FDI) can also result from the use of an alternative proprietary asset; that is, the skills and management expertise that are acquired through the accumulation of various forms of foreign experience. •The value creation comes from the extension of an MNC's experience-based capabilities to the host country to mitigate country-level risks. This experience can moderate the negative influence of environmental risk to create value for a firm and its investors. •In our sample of 305 FDIs, we find that Japanese MNCs that had direct or indirect experience in a host country showed greater abnormal returns in a FDI, particularly where environmental risk was high. © 2010 Gabler Verlag.|
|Source Title:||Management International Review|
|Appears in Collections:||Staff Publications|
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