Hysteresis in adjusting the ownership structure of foreign subsidiaries |
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| Affiliation: | 1. Department of Economic Relations and Development, Democritus University of Thrace, University Campus, 69100 Komotini, Greece;2. Olin School of Business, Washington University, St. Louis, MO 63130-4899, USA;1. Istanbul Sehir University, School of Business, Altunizade, Istanbul, Turkey;2. Florida State University, College of Business, Tallahassee, FL 32306, United States;3. University of Wisconsin, Madison, WI 53706, United States;1. Department of Pathology, College of Medicine, King Saud University, Riyadh, Saudi Arabia;2. Department of Pediatrics, College of Medicine, King Saud University, Riyadh, Saudi Arabia;3. Department of Family and Community Medicine, College of Medicine, King Saud University, Riyadh, Saudi Arabia;4. Department of Medicine, College of Medicine, King Saud University, Riyadh, Saudi Arabia;5. Department of Infection Control, College of Medicine, King Saud University, Riyadh, Saudi Arabia;6. Department of Infection and Immunity, Research Center, King Faisal Specialist Hospital and Research Center, Riyadh, Saudi Arabia;7. Department of Laboratory Medicine, Yale University School of Medicine, New Haven, CT;1. Faculty of Economics and Management, University of Sousse, BP 307-City Riadh, 4023 Sousse, Tunisia;2. Faculty of Economics and Management, University of Tunis el Manar, BP 248 El Manar II, 2092 Tunis, Tunisia;1. Research Center for Behavioral Disorders & Substance Abuse, Hamadan University of Medical Sciences, Hamedan, Iran;2. Department of Nursing, Tarbiat Modares University, Tehran, Iran;3. Department of Biostatistics, Tarbiat Modares University, Tehran, Iran;4. Department of Psychology, University of Zurich, Switzerland;5. Department of Nursing, Hamadan University of Medical Sciences, Hamedan, Iran;1. Southern Illinois University Edwardsville School of Pharmacy, Edwardsville, IL;2. Chicago State University College of Pharmacy, Chicago, IL;3. College of Pharmacy, Rosalind Franklin University, North Chicago, IL;4. College of Pharmacy, Midwestern University, Downers Grove, IL;5. St. Louis College of Pharmacy, St. Louis, MO |
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| Abstract: | ![]()
In this paper we study the insight that multinational companies might delay the adjustment of the ownership structure of their foreign subsidiaries despite the fact that the fundamentals call for an immediate adjustment (hysteresis). Based on company-level data, we empirically investigate the company and industry conditions that influence the strength of the hysteresis in adjusting this ownership structure. Exchange rate volatility and adjustment cost strengthen the hysteresis in ownership adjustment decisions, while the growth of sales in the foreign market weakens it. |
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