Abstract
Direct foreign investment (DFI) may benefit investors through superior cash flows or lower risk relative to purely domestic firms. This paper considers three groups of U.S. firms: those without significant international operations, those with international operations in developed countries, and those with international operations in developing countries. After performing risk-return performance analysis on the three groups, the findings show developing country DFI results in inferior performance, but that there are no statistically significant differences in market performance among the three.
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*J. Markham Collins is Associate Professor of Finance at the University of Tulsa, and recently served as Visiting Professor at the University of Hong Kong. His international research includes publications on the determinants of international capital structure, international cash management practices, and the effects on affiliate value resulting from real exchange rate changes.
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Collins, J. A Market Performance Comparison of U.S. Firms Active in Domestic, Developed and Developing Countries. J Int Bus Stud 21, 271–287 (1990). https://doi.org/10.1057/palgrave.jibs.8490335
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DOI: https://doi.org/10.1057/palgrave.jibs.8490335