Abstract: The literature on capital structure decisions of multinational enterprises for their subsidiaries is dominated by studies of tax planning, although some other motivations such as limiting political risk and overcoming host-country capital market imperfections have also received attention. In this proposal, we outline a study taking a strategic perspective on MNE subsidiary capital structure, based on Williamson’s (1988) transaction cost theory of finance. Using subsidiary-level Norwegian foreign direct investment data over the period 2000 to 2006, we investigate the impact of important transaction cost theory variables such as asset specificity and external uncertainty on the relative use of equity versus external and internal debt. Preliminary analyses only partially support a transaction cost view of subsidiary-level financing decisions.

Abstract: This study focuses on the decision to expand existing foreign sales activities towards production, thereby substituting exporting by local production as international operation mode. Complementing traditional theories on foreign direct investment and the internationalization process of the firm, it is suggested that multinational enterprises pursue backward integration of foreign subsidiaries in order to exploit arbitrage opportunities in their existing network of foreign operations. We predict that, besides well-known factors, fluctuations in exchange rates, differences in corporate income tax regimes, investment incentives granted by host governments, and external knowledge at other foreign locations explain backward integration of foreign sales activities into production. We aim to test our hypotheses using event history analysis on a dataset of 382 manufacturing firms showing 514 cases of backward integration between 1999 and 2011.

Abstract: This paper examines how energy intensiveness and carbon emissions relate to foreign equity ownership for a sample of Japanese listed industrial firms during 2003-2010. We find that energy intensiveness and carbon emissions are negatively associated with foreign equity ownership. This negative association is more evident for foreign institutional investors than for foreign individual investors. Our results also suggest that low foreign institutional investment in energy intensive firms is largely through intermediation effects of carbon emissions.

Abstract: We add to the literature on the internationalization-performance relationship by differentiating between regulated and non-regulated industries. We argue that both face liabilities at the beginning of their internationalization that damage their performance, but once they are overcome, after gaining enough international experience, further international expansion leads to increases in performance. However, whereas there is an internationalization threshold upon which non-regulated firms return to the path of value destruction, in the case of regulated firms this threshold does not exist. Therefore, the performance of multinationals operating in regulated industries displays a U-shaped pattern while the one in non-regulated industries has an S-shaped nature. We confirm our predictions by estimating Heckman’s two-stage models (1979) on a panel data sample from 1986 to 2010 which includes all Spanish listed firms in 1990.