European Parliament Library

Multinational Affiliates and Local Financial Markets, Selin Sayek, Alexander Lehmann, Hyoung Kang

Abstract
We use data on the sources of debt finance of U.S. majority-owned foreign affiliates in 53 countries over the period 1983 to 2001 to examine the role of financial market development, and exposure to host country-specific risk on the financing choices of these affiliates. We find that total balance sheets are about four times as large as the cross-border component of foreign direct investment (FDI). The extent of financial leverage through local debt is positively related to host-country corporate tax rates, exchange rate variability, local currency-denominated sales, and financial development. Factors that further the role of local debt reduce that of parent company debt, and through this substitution overall leverage increases
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. THE FINANCING OF MULTINATIONAL SUBSIDIARIES""; ""III. THE LITERATURE""; ""IV. HEDGING BY FOREIGN AFFILIATES""; ""V. EMPIRICAL RESULTS ""; ""VI. CONCLUSIONS AND POLICY IMPLICATIONS""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (26 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462309573

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