Who is Afraid of Political Risk? Multinational Firms and their Choice of Capital Structure

Arbeitspapier

This paper investigates how multinational firms choose their capital structure in response to political risk. We focus on two choice variables, the leverage and the ownership structure of the foreign affiliate, and we distinguish different types of political risk, like expropriation, corruption and confiscatory taxation, and In our theoretical analysis we find that as political risk increases the ownership share always decreases whereas leverage can both increase or decrease, depending on the type of political risk. Using the Microdatabase Direct Investment of the Deutsche Bundesbank, we find supportive evidence for these different effects.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SFB/TR 15 Discussion Paper ; No. 213

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multinational Firms; International Business ; International Investment; Long-term Capital Movements ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Thema: multinational Terms ; political risk ; capital structure ; leverage ; ownership structure

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Kesternich, Iris ; Schnitzer, Monika
• Ereignis: Veröffentlichung
• (wer): Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY)
• (wo): München
• (wann): 2007

Weitere Informationen

• DOI: doi:10.5282/ubm/epub.13339
• Handle: http://hdl.handle.net/10419/94181
• URN: urn:nbn:de:bvb:19-epub-13339-6
• Letzte Aktualisierung: 20.09.2024, 08:25 MESZ