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Testing the Link Between Multinationality and the Return on Foreign Assets

Alina Kudina (Assistant Professor, Warwick Business School, The University of Warwick, Coventry, UK)
Alan M. Rugman (Professor of International Business, Director of Research, School of Management, Henley Business School, University of Reading, Henley‐on‐Thames, Oxon, UK)
George S. Yip (Dean, Rotterdam School of Management, Erasmus University, Burgemeester Oudlaan 50, 3062 PA Rotterdam, The Netherlands)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 19 August 2009

293

Abstract

A large and robust empirical literature demonstrates that there is a strong relationship between the performance of a multinational enterprise (MNE) and its degree of multinationality. We develop a new metric to capture the return on foreign assets (ROFA), which we use as an alternative metric to return on total assets (ROTA) as a dependent variable representing performance. We find a significant S‐shaped relation between ROFA and the degree of multinationality across a large set of UK firms.

Keywords

Citation

Kudina, A., Rugman, A.M. and Yip, G.S. (2009), "Testing the Link Between Multinationality and the Return on Foreign Assets", Multinational Business Review, Vol. 17 No. 3, pp. 123-142. https://doi.org/10.1108/1525383X200900020

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

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