Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/88660
Authors: 
Dill, Verena
Jirjahn, Uwe
Smith, Stephen C.
Year of Publication: 
2013
Series/Report no.: 
Research Papers in Economics 1/13
Abstract: 
Comparing domestic- and foreign-owned firms in Germany, this paper finds that foreign-owned firms are more likely to focus on short-term profit. This influence is particularly strong if the local managers of the German subsidiary are not sent from the foreign parent company. Moreover, the physical distance between the foreign parent company and its German subsidiary increases the probability of focusing on short-term profit. These findings conform to the hypothesis that foreign owners facing an information disadvantage concerning the local conditions of their subsidiaries are more likely to favor short-term profit. However, we do not identify differences in “short- termism” between investors from “Anglo-Saxon” and other foreign countries; rather, results point in the direction of more general features of international business investment.
Subjects: 
Foreign Ownership
Short-Termism
Asymmetric Information
Globalization
JEL: 
F23
G34
M16
P10
Document Type: 
Working Paper

Files in This Item:
File
Size
386.37 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.