JIBS Paper #553 THE INTERNATIONAL CONTROL CONUNDRUM WITH EXCHANGE RISK: AN EVA FRAMEWORK

ثبت نشده
چکیده

Principal-agent problems between corporate parent and subsidiary operations are frequently exacerbated in international settings by exchange rate fluctuations between the foreign subsidiary’s local currency and the multinational corporation’s (“MNC”) reference currency. This article develops a conceptual solution to resolve this international control conundrum using an Economic Value Added (“EVA”) contingent framework. The framework accounts for nominal exchange rate fluctuations and differential inflation rates between the countries of parent and subsidiaries, and for currency-pass-through policies of rival firms in the foreign subsidiary’s local market. The resulting control framework suggests how MNC parents may assess foreign subsidiary performance in emerging market countries where unexpected, exchange-related shocks might otherwise skew such assessment.

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

Letter from the Editor-in-Chief: Standing on the shoulders

Journal of International Business Studies (2010) 41, 755–758. doi:10.1057/jibs.2010.13 SPECIAL ISSUE This issue of JIBS begins with an exciting Special Issue (SI) on ‘‘Conflict, Security and Political Risk: International Business in Challenging Times’’, edited by Area Editor Witold Henisz and Guest Editors Edward Mansfield and Mary Ann Von Glinow. Fifty-four submissions to the SI were handled b...

متن کامل

A Study on Relationship between Intellectual Capital and Refined EVA in Insurance Companies as Member of Tehran Stock Exchange

Considering necessity of recognizing the knowledge-based economy and achieving its foundations in Iran, the main issue of this research is to clarify the relationship between intellectual capital and Refined EVA in insurance companies which are member of Tehran Stock Exchange. In this research, the Refined EVA index was used to evaluate and measure the intellectual capital of the Palick model a...

متن کامل

Does Exchange Rate Non-Linear Movements Matter for Analyzing Investment Risk?. Evidence from Investing in Iran’s Petrochemical Industry

< p>The present study models the risk of investment in the petrochemical industry considering the impacts of exchange rate (US dollar to Iran''''s Rial) movements using the time series data from November 2008 to March 2019 and ARFIMA-FIGARCH framework. The empirical results prove the existence of the Fractal Market Hypothesis, FMH, and the Long Memory property in both the risk and return of the...

متن کامل

Does Exchange Rate Non-Linear Movements Matter for Analyzing Investment Risk? Evidence from Investing in Iran’s Petrochemical Industry

The present study models the risk of investment in the petrochemical industry considering the impacts of exchange rate (US dollar to Iran's Rial) movements using the time series data from November 2008 to March 2019 and ARFIMA-FIGARCH framework. The empirical results prove the existence of the Fractal Market Hypothesis, FMH, and the Long Memory property in both the risk and return of the petroc...

متن کامل

Intellectual Capital Effects by Satisfactory Design on Financial and Economic Performance of Malaysian Companies

This paper aims to prepare intellectual capital component by satisfactory design. Satisfaction of employees, customers and residual benefit are the main core of present measurements. The correct position of these items in the financial statements are proposed by correcting entries, then the impact of these elements are investigated on the return on equity, revenue growth and economic value adde...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:

دوره   شماره 

صفحات  -

تاریخ انتشار 2001