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The value impact of internationalization: theory and evidence, the French case

Isabelle Martinez (Toulouse University)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 March 2002

814

Abstract

Outlines the three theories which link multinationality to share value (internalization, imperfect capital markets and managerial objectives), reviews the relevant research and hypothesizes that a multinational’s degree of internalization is positively related to its accounting value (q‐value). Tests this using 1994‐1998 data on French listed companies and presents the results which support the hypothesis, the existence of a size effect (smaller firms have higher q‐values) and leverage effect (higher debts are linked with lower q‐values), but sow no significance in the proportion of intangible assets; i.e. they support the imperfect capital markets theory but not the internalization theory. Considers consistency with other research and opportunities for further research.

Keywords

Citation

Martinez, I. (2002), "The value impact of internationalization: theory and evidence, the French case", Managerial Finance, Vol. 28 No. 3, pp. 73-82. https://doi.org/10.1108/03074350210767744

Publisher

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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