Abstract
The internalization theory of multinational firms proposes that direct international investment occurs when a firm has information-related intangible assets with public good properties. We find that firms with characteristics suggesting the presence of information-based assets experience a significantly positive stock price reaction upon announcing a foreign acquisition. On the other hand, firms apparently lacking such assets experience at best zero abnormal returns upon announcing overseas acquisitions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have