Gains from Corporate Multinationalism: Evidence from the China Experience |
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| Authors: | Atul Gupta Carl B McGowan Jr Lalatendu Misra Agnes Missirian |
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| Institution: | Bentley College, Waltham, MA 02154.;University of Missouri, Columbia, MO 65201.;University of Texas, San Antonio, TX 78285. |
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| Abstract: | This paper examines the valuation impact of U.S. multinational corporations' expansion into the Peoples Republic of China (PRC during 1979 to 1987. The market response to the announcement of a firm's initial entry into the PRC is found to be positive and statistically significant, suggesting that expansion into China was a value-enhancing activity. Equity joint venture modes of entry are found to result in greater shareholder gains than nonequity expansion modes. The influence of degree of multinationality, market share, growth, and technology-related variables on the size of shareholder gains is also analyzed. |
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