Home country environment and the downside risk implications of multinationality: Empirical evidence from Chinese SMEs

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2023-09-01 DOI:10.1016/j.mulfin.2023.100810

Chao Zhou

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引用次数: 3

Abstract

According to real options theory, a global network built through multinational investments endows a firm with a series of options for future development. These options can enhance a firm’s operational flexibility, reducing its downside risk. This study aims to investigate the home country conditions necessary to achieve multinationality’s downside risk effect in Chinese small and medium-sized enterprises (SMEs). Using data from Chinese manufacturing SMEs from 2003 to 2021 and a Tobit regression model, this study finds that multinationality can significantly reduce the downside risk of Chinese SMEs. Moreover, the degree of home country economic openness and financial development can significantly enhance multinationality’s negative effect on downside risk. Further analysis suggests that the moderating effects of the home country environment are more prominent for state-owned firms than for privately-owned firms. Our findings emphasize the important role of a home country environment in achieving the value of multinationality’s flexibility.

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母国环境与跨国经营的下行风险影响——来自中国中小企业的经验证据

根据实物期权理论，通过跨国投资建立的全球网络为企业的未来发展提供了一系列选择。这些选择可以增强公司的运营灵活性，降低其下行风险。本研究旨在考察中国中小企业实现跨国下行风险效应所需的母国条件。本研究利用2003-2021年中国制造业中小企业的数据和Tobit回归模型发现，跨国性可以显著降低中国中小企业的下行风险。此外，母国经济开放程度和金融发展程度可以显著增强跨国对下行风险的负面影响。进一步的分析表明，母国环境对国有企业的调节作用比私营企业更为突出。我们的研究结果强调了母国环境在实现多国灵活性价值方面的重要作用。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.