the efficiency of the dollar sterling gold standard 1890 1908 the gold standard in 1890 1908 period was efficient by any criterion the number of gold point violations was small violations did not persist gold movements occurred in the predictable profitable direction in response to violations and the mean absolute exchange rate for 1881 1900 was at exactly half the average of the gold points the actions of the bank of england and u s treasury in manipulating gold points were consistent with the rules of the game and in fact facilitated the efficiency of the gold standard in contrast the operations of banking syndicates were of a nature to generate inefficiencies but the evidence is that they did not have this effect

managerial control of international firms and patterns of direct investment abstract formal analyses of international firms have concentrated on advantages from large operations due to for example economies of scope however the standard framework implicitly assumes the existence of managerial costs for running international operations the paper develops a model that explicitly incoporates both economies of scope and costs of managerial control of large and international operations it highlights the potential importance of international firms organizational structure suggesting a qualitative difference between situations where international firms have different stages of production located in different countries and situations where firms in addition have the same stage located in different countries

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

taxes tariffs and transfer pricing in multinational corporate decision making three interrelated aspects of u s multinational corporation activity are analyzed here the ability to shift profits from high tax countries to low tax countries the impact of host country taxes and tariffs on the distribution of real capital and the influence of these policies on international trade patterns of the united states and host countries the cross sectional empirical analysis indicates that the observed pattern of reported profits in high and low tax countries is consistent with income shifting behavior and that real investment responds to host country effective tax rates and tariffs the united states appears both to import more from and export more to low tax countries where mnc investment is greater but this bilateral focus must be amplified to consider multilateral effects if trade benefits are to be projected copyright 1991 by mit press

strategizing by firms in the presence of markets for resources strategizing by firms from the resource based view is concerned with the process through which firms acquire a distinctive bundle of resources that is costly and time consuming for competitors to duplicate or imitate a central question facing any firm therefore is its strategy for accumulating the resources that underpin its production activities in this article the process of resource accumulation is discussed as one involving potentially both internal resource development and external resource acquisition from the perspective of the strategic issues involved in making a choice between these options emerging markets for technologies and know how through licensing and other forms of resource exchange have opened up new avenues through which firms may jostle for advantage the article is concerned with three major aspects of this process illustrating the discussion with cases from biotechnology and pharmaceuticals first the strategizing by firms around the internal development vs external sourcing issue is discussed as informed by the practices of leading firms and how these lend greater variety of strategic options for firms second the potential competitive advantages as well as disadvantages to be secured by firms through the process of external sourcing as compared with the well known potential advantages accruing to incumbents through internal development such as time compression diseconomies and causal ambiguity and third the criteria to be used by firms to strategically evaluate resources individually as contrasted with the strategic evaluation of the resource bundle or totality these criteria it is argued turn on the issues of marginal value contribution resource complementarities and synergies resource variety and transferability involving intellectual property issues successful firms it is argued expand their options through blending internal resource accumulation with external resource leverage thereby deepening their distinctive dynamic capabilities this approach extends the framework of the rbv enabling it to encompass resource driven schumpeterian competition and such aspects of industrial dynamics as specialization modularization and imitative challenge copyright 2003 oxford university press

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

the multinational firm direct investment is incorporated into a simple general equilibrium model of international trade the analysis focuses on an attempt to endogenize the internalization decision it is argued that a reasonable approach assumes that arm s length contracts must be simple so that complex arrangements require internalization the model relates direct investment to the degree of underlying uncertainty and to fundamental trade determinants such as relative factor endowments the behavior of the model contrasts sharply with that of the markusen helpman model which takes internalization for granted

knowledge market failure and the multinational enterprise a reply debate is an indication that an issue warrants discussion the comments of james love and donald mcfetridge in this issue are fine statements that articulate a received wisdom their comments differ with each other and these differences remind us that there is less consensus in our understanding of internalization and transaction costs than commonly supposed if we do not address all of the commentators specific points it is not for lack of appreciation but because it is our belief that a fuller vision of the terrain already mapped and that which is yet uncharted would provide a more useful basis for exploration and discovery a listing of issues is the task of a referee while a published debate might perform a useful task by laying out the contours of the research tradition and future

deregulation market power and risk behaviour in spanish banks abstract this paper provides empirical evidence on the effects of regulatory changes in the market power of spanish banks it also analyses the response of banks in terms of risk taking behaviour as a result of a reduction in economic profits we find that liberalisation measures have increased competition and eroded banks market power we observe that banks with lower charter values tend to have lower equity assets ratios lower solvency and to experience higher credit risk the last evidence is new in the literature and calls for strengthening regulatory concerns about credit risk management by banks in situations of increased competition

accounting for endogeneity when assessing strategy performance does entry mode choice affect fdi survival firms choose strategies based on their attributes and industry conditions therefore strategy choice is endogenous and self selected empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect i highlight how self selection on hard to measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect although this concern applies to a wide range of strategy questions to demonstrate its effect i empirically examine if entry mode choice acquisition versus greenfield influences foreign direct investment survival in specifications that do not account for self selection i find that greenfield entries have survival advantages compared to acquisitions this confirms previous findings however the significance of this effect disappears once i account for self selection of entry mode in the empirical estimates the results confirm that estimates from models that do not account for self selection of strategy choice can lead to incorrect or misleading conclusions

using acquisitions to access multinational diversity thinking beyond the domestic versus cross border m a comparison prior research provides ambiguous results regarding the performance of international acquisitions drawing on a survey of 248 acquisitions we find that acquirers enhance their capabilities when they buy a target with a multinational geographic scope a financial event study uses a subsample of the acquisitions to show that the financial markets also value targets multinational scope both surveys and stock market based studies suggest that targets with access to heterogeneous resource environments provide the acquirer with greater potential for capability enhancement and financial performance in contrast simply acquiring firms across borders has less influence on post acquisition outcomes the study demonstrates greater value of the attributes of the target rather than of international expansion alone thus the multinational scope of the target is more likely to account for the resource diversity provided by the target than the country of origin of the target per se the study changes the emphasis on multinational acquisitions by shifting the focus from foreign market expansion country level emphasis to accessing geographically distributed resources that are embedded in target firms firm level emphasis

synergy managerialism or hubris an empirical examination of motives for foreign acquisitions of u s firms this study examines the motives underlying foreign acquisitions of u s firms estimates the extent of value creation associated with such acquisitions and examines how total gains are shared between acquiring firms and targets we show that the synergy hypothesis is the predominant explanation for our sample of foreign acquisitions of u s firms however the hubris hypothesis coexists with the synergy hypothesis in explaining the acquisitions in our sample that are characterized by positive total gains the evidence is also consistent with the managerialism hypothesis for the acquisitions in our sample with negative total gains we show that the incidence of competition is associated with higher total gains as well as higher gains to targets

imperfect competition risk taking and regulation in banking abstract we asses the welfare implications of banking competition under various deposit insurance regimes in a model of imperfect competition with social failure costs and where banks are subject to limited liability we study the links between competition for deposits and risk taking incentives and conclude that the welfare performance of the market and the appropriateness of alternative regulatory measures depend on the degree of rivalry and the deposit insurance regime specifically when competition is intense and the social failure costs high deposit rates are excessive both in a free market and with risk based insurance if insurance premiums are insensitive to risk then the same is true even if there is no social cost of failure we find also that in an uninsured market with nonobservable portfolio risk or with flat premium deposit insurance deposit regulation rate regulation or deposit limits and direct asset restrictions are complementary tools to improve welfare in an uninsured market with observable portfolio risk or with risk based insurance deposit regulation may be a sufficient instrument to improve welfare

multinationals multi plant economies and the gains from trade a general equilibrium model of a multinational enterprise based on economies of multi plant operation is developed these economies are modelled as arising from the existence of a joint input whose productivity in each production facility is independent of the number of facilities maintained by a firm the multinational thus offers the world increased technical efficiency by eliminating the duplication of the joint input that would occur with independent national firms since this technical efficiency may come at the expense of increased market power the full determinants of home country host country and world welfare are considered

regulatory reform in european banking abstract a stylized model of the role of banks in a context of imperfect financial markets where the potential for market failure exists is proposed the specificity of banking is analyzed and the need of regulation explained the study of regulatory responses highlights the importance of their associated side effects particular attention is devoted to the interaction of regulation and competition in a strategic context the effects of deregulation and european integration of financial markets on banking competition are dealt with in the proposed framework

international corporate diversification market valuation and size adjusted evidence errunza and senbet es 7 analyze the effects of international operations on the market value of the firm both at theoretical and empirical levels the theoretical model which is largely heuristic exploits the costly supply adjustment of multinational firms mncs in providing international portfolio diversification services to investors who face differential cost barriers to direct holdings of assets across national boundaries mncs compete as financial intermediaries to undo the barriers so that in equilibrium profits are driven out mncs and pure domestic firms sell at an equivalent risk adjusted return however costly financial intermediation and the associated relative efficiency leads to a positive valuation effect for mncs relative to purely domestic firms further the equilibrium analysis implies that demand side investor barriers to international capital flows alone are inconsequential to the valuation of mncs in their pure financial role but that the interaction with the supply side costs are necessary to produce a valuation effect at the corporate level es subject the theory to an empirical analysis in a value based approach by employing a variant of tobin s 17 qratio the analysis controlling for industrial market power suggests that the relationship between the excess valuation and the degree of international involvement doi has magnified over periods characterized by severe u s government controls vis a vis the more recent periods in this paper we formalize the theoretical argument by viewing indirect portfolio diversification by mncs as a means of completing the international capital market we employ a paradigm in the unanimity literature and formally characterize the equilibrium in which there is a rationale for mnc financial intermediation we then perform an expanded empirical study by employing generalized least squares and maximum likelihood procedures since the positive relationship between excess valuation and doi as suggested in es 7 might be attributed to the so called small firm or size and the p e effects the test methodology controls for such effects also the traditional literature has relied upon foreign sales percentage as a proxy for doi in view of the well recognized limitations of this proxy we employ four different measures of international

liquidity provision banking and the allocation of interest rate risk abstract the paper studies the efficient allocation of technology induced interest rate risk and the implications of such risk for efficient liquidity provision complete immunization against interest rate risk is shown to be undesirable as it precludes the exploitation of favourable reinvestment opportunities under the assumptions of diamond dybvig 1983 interest induced valuation risks of long term assets should be born by early withdrawers reinvestment opportunity risks of short term assets by late withdrawers efficient liquidity provision thus entails no shifting of interest rate risk in the absence of additional moral hazard second best allocations can be implemented through unregulated competition among banks

the effects of international operations on the market value of the firm theory and evidence this paper investigates the existence of monopoly rents associated with international operations in a market value theoretic framework the benefits of international operations evolve from such factors as 1 imperfections in the product and factor markets 2 differential international taxation and 3 imperfections in the financial markets in this paper these factors are subject to an equilibrium analysis in the context of recent advances in financial theory in particular imperfections in the financial sector arising from corporate international diversification are examined in a framework which allows a supply adjustments by multinational firms and b the interaction of barriers to international capital flows faced by both firms and investors taking the u s capital market and investors as a base we then specify the conditions under which the foregoing imperfections get priced out in an equilibrium these pricing effects cannot be detected empirically through the methodologies employed by the existing studies which examine the effects of corporate international diversification indeed it was an attempt to rescue the limitations of these studies which initially motivated our paper the existing empirical inquiries into this area rely on traditional risk adjusted performance measures e g 7 or international analogs of return generating processes e g 1 8 instead at the empirical level we employ a value based method which is in the same vein of the thomadakis 17 approach developed to identify the monopoly benefits of industrial market structure we conduct the tests over subperiods characterized by differential government controls in an attempt a to separate the pure financial motives for multinationality from other motives and b to detect if the benefits of international operations carry through recent periods

technological effects of m as in spanish manufacturing this article explores whether mergers and acquisitions m as generate differentiated impacts on the acquiring firms r d expenditures patents granted and product innovations considering m as as a way of foreign expansion we examine whether the technological effects differ between domestic and foreign owned acquirers assuming that the effects on the technological efforts and performance may differ across industries the availability of statistical information for a stable sample of manufacturing companies in spain during the 1990s allows us to follow a dynamic approach to the issue our findings confirm the existence of differentiated effects on technological inputs and outputs across industries as well as diversity between domestic and foreign owned firms involved in m as copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

internalization an event study test abstract the internalization theory of multinational firms proposes that direct international investment occurs when a firm has information related intangible assets with public good properties we find that firms with characteristics suggesting the presence of information based assets experience a significantly positive stock price reaction upon announcing a foreign acquisition on the other hand firms apparently lacking such assets experience at best zero abnormal returns upon announcing overseas acquisitions

technological capabilities of countries firm rivalry and foreign direct investment studies on foreign direct investment fdi have concentrated on sectoral effects but rarely on country patterns in this paper we use u s department of commerce data to identify the largest country shares of new fdi entries into the u s and the technological motivations for their investments based on the technological intensities of major investing countries in manufacturing industries we conclude that technological industries attract a disproportionate share of fdi entries however the acquisition of u s technology is not a major motivation the findings indicate that industry rivalry is an important dimension to understanding fdi

information technology as competitive advantage the role of human business and technology resources this paper investigates linkages between information technology it and firm performance although showing recent signs of advance the existing it literature still relies heavily on case studies anecdotes and consultants frameworks with little solid empirical work or synthesis of findings this paper examines the it literature develops an integrative resource based theoretical framework and presents results from a new empirical study in the retail industry the findings show that its alone have not produced sustainable performance advantages in the retail industry but that some firms have gained advantages by using its to leverage intangible complementary human and business resources such as flexible culture strategic planning it integration and supplier relationships the results support the resource based approach and help to explain why some firms outperform others using the same its and why successful it users often fail to sustain it based competitive advantages

knowledge seeking and location choice of foreign direct investment in the united states to what extent do firms go abroad to access technology available in other locations this paper examines whether and when state technical capabilities attract foreign investment in manufacturing from 1987 1993 we find that on average state r d intensity does not attract foreign direct investment most investing firms are in lower tech industries and locate in low r d intensity states suggesting little interest in state technical capabilities in contrast we find that firms in research intensive industries are more likely to locate in states with high r d intensity foreign firms in the pharmaceutical industry value state r d intensity the most at a level twice that of firms in the semiconductor industry and four times that of electronics firms interestingly not only firms from technically lagging nations but also some firms from technically leading nations are attracted to r d intensive states this suggests that beyond catching up firms use knowledge seeking investments also to source technical diversity

corporate takeover bids methods of payment and bidding firms stock returns this study explores the role of the method of payment in explaining common stock returns of bidding firms at the announcement of takeover bids the results reveal significant differences in the abnormal returns between common stock exchanges and cash offers the results are independent of the type of takeover bid i e merger or tender offer and of bid outcomes these findings supported by analysis of nonconvertible bonds are attributed mainly to signalling effects and imply that the inconclusive evidence of earlier studies on takeovers may be due to their failure to control for the method of payment recent studies on corporate takeovers provide inconclusive results on the valuation effects of acquisitions on the common stock of bidding firms 1 substantial differences are reported between the studies that analyze acquisitions initiated as tender offers and those that confine their samples to merger proposals the existence of mixed empirical findings for the bidding firms makes it difficult to interpret existing evidence and to draw conclusions about the managers acquisition motivations nevertheless the reason for the substantial difference between empirical findings on mergers and tender offers still remains an unresolved issue it is observed however that mergers are usually common stock exchange offers whereas tender offers are usually cash offers given that different methods of financing a project have different signalling implications myers and majluf 39 the differential stock returns of bidders in mergers and tender offers may be due to the method of acquisition financing

the choice between mergers acquisitions and joint ventures the case of japanese investors in the united states this paper investigates the determinants of the choice between two alternative methods of pooling similar and complementary assets the merger acquisition and the greenfield equity joint venture two theories of the determinants of that choice are tested on a sample of japanese investments in the united states the results show that equity joint ventures are preferred over acquisitions when the desired assets are linked to nondesired assets because the u s firm owning them is large and not divisionalized when the japanese investor has little previous experience of the american market and hence seeks to avoid postmerger integration problems when the japanese investor and the u s partner manufacture the same product and when the industry entered is growing neither very rapidly nor very slowly

financial deregulation in france in the past few years an extraordinary amount of financial deregulation has taken place in france only as recently as 1983 the country was under tight capital controls faced a wide range of administered and cartelised interest rates possessed a relative sparsity of financial instruments and had its banks strapped in a credit corset or credit ceiling arrangement known as the encadrement du credit today there is only a vestige of the capital controls the only administered interest rates that remain concern bank deposits a host of new financial instruments has emerged and there is no encadrement banking is no longer the secure business that it used to be quite significantly the first bank failure since world war ii occurred in 1987 a few other have followed since commission bancaire 1989 a couple of french bankers put the matter nicely in a recent assessment henceforth the french banking apparatus will need to show that it can manage risks instead of regulations levy lang and henrot 1987 this paper will provide a quick guide to the deregulation why it happened and what took place in addition some of the basic questions posed by the deregulation will be raised for lack of space a fundamental knowledge of general french conditions prior to the deregulation will be taken for granted the reform took sail under the socialists in 1984 85 after a period of socialist advance into opposite waters toward bank nationalisation and further regulation although the liberahsation was presented as necessary to assure the survival of paris as a financial center in view of deregulation abroad the move looks much more like a deliberate choice we see this best by comparing france and germany the german domestic financial environment is a fairly regulated one but as a country with free capital movements and the leader of monetary policy in the european monetary system ems germany has seen little cause to deregulate its financial markets what pressure to liberalise it has felt has come from the european commission following the white paper on european financial integration in june 1985 on the other hand france as a country which required capital controls to steer an independent course in macroeconomic policy in the ems turned toward financial deregulation before the white paper appeared when economic historians look back at this important juncture in european

greenfield vs acquisition the strategy of japanese investors in the united states multinational firms can enter a foreign market by taking over existing local firms acquisitions or by setting up new ventures greenfield investments surprisingly there has been limited empirical work on this topic this paper examines the determinants of this choice by looking at japanese entries into the united states by focusing on firms of one country entering a single market we are able to separate the impact of a firm s strategy from that of the characteristics of the target industry or country this paper tests simultaneously a number of competing hypotheses the results suggest that acquisitions are used by japanese investors with weak competitive advantages while investors with strong advantages find that greenfield investments are a more efficient way to transfer these advantages to the u s acquisitions are also chosen to enter industries with either very high or very low growth rates when entry is at a scale that is large relative to the parent and when entry is into a different industry the japanese investor s previous experience of the u s market its financial situation and its status as a follower in an oligopolistic industry have no statistically significant impact on the entry mode neither do u s stock market conditions

the paradox of interest rates of the greenback era a reexamination abstract the two leading explanations for the counterintuitive behavior of interest rates during the greenback era 1862 1878 the resumption expectations model of calomiris 1988 and the capital flow argument of friedman and schwartz 1963 are inconsistent with each other in terms of their treatment of financial arbitrage a methodology to identify unexploited arbitrage opportunities in financial data is proposed observable returns strongly suggest that the money market of the greenback era did not systematically admit arbitrage except possibly around the times of the gold corner of 1869 and the panic of 1873 which implies that calomiris provides a more plausible explanation

the macroeconomic implications of financial deregulation abstract this paper explores the possible macroeconomic consequences of financial deregulation in an institutional environment where deregulation raises risks in banking the central bank is supposed to maximize an objective function in which the probability of bank failure is an argument it is then shown that the usual tradeoffs between policy objectives imply that financial deregulation will lead to more interest rate smoothing than would otherwise take place and further that because of restricted entry into banking deregulation will call for some inflation the transition toward deregulation raises special problems which are likely to require a more gradual approach toward the stationary equilibrium

the impact of iso 9000 diffusion on trade and fdi a new institutional analysis the effects of iso 9000 diffusion on trade and foreign direct investment fdi have gone understudied we employ panel data reported by oecd nations over the 1995 2002 period to estimate the impact of iso adoptions on country pair economic relations we find iso diffusion to have no effect in developed nations but to positively pull fdi i e enhancing inward fdi and positively push trade i e enhancing exports in developing nations

corporate performance and managerial remuneration an empirical analysis abstract economic theories of efficient compensation predict a positive relationship between executive pay and corporate performance and yet efforts to document this relationship have been largely unsuccessful in this paper we argue that previous cross sectional studies have omitted important variables which seriously bias their results using data that focus on individual executives over time we find that executive compensation is strongly positively related to corporate performance as measured by shareholder return and growth in firm sales the results are robust to the stock market performance measure utilized

banking deregulation in europe banking deregulation ernst baltensperger and jean dermine deregulation of financial services is well under way in many european countries this has led to fears that economies are now more vulnerable to macroeconomic shocks the authors focus on one aspect of financial deregulation namely liberalization of the banking system they show that measures such as the abolition of reserve requirements increase macroeconomic variability under some circumstances but reduce it under others no general macroeconomic case can be made for banking regulation or for its liberalization analysis of microeconomic issues is more fruitful asymmetric information and the risks of contagion in a panic can lead to runs against the banking system to the extent that these are socially inefficient public intervention may be justified this presumption is stronger since the risks of bank runs have grown recently with the increased maturity mismatch the finance of illiquid loans by liquid short term deposits to meet this danger the authors recommend regulation of deposit contracts whilst preserving incentives for bank monitoring by private parties specifically they propose an ex post liability of current and former depositors when banks default thereby offsetting the incentive to withdraw funds at the onset of a crisis being quick off the mark would no longer be sufficient and sophisticated depositors would press for greater disclosure and fuller monitoring of bank activities the authors also recommend that remaining controls on deposit interest rates should be scrapped and that supervision of international banking should be cooperatively conducted by host and parent authorities

event studies in management research theoretical and empirical issues we examined the use of event studies in management research and found that there was inadequate attention paid to theoretical and research design issues this lack of attention may lead to false in

the structure of ownership and the theory of the firm the separation of ownership from control produces a condition where the interests of owner and of ultimate manager may and often do diverge and where many of the checks which formerly operated to limit the use of power disappear in creating these new relationships the quasi public corporation may fairly be said to work a revolution it has divided ownership into nominal ownership and the power formerly joined to it thereby the corporation has changed the nature of profit seeking enterprise 1

strategic investments and the development of multinationals a model of multinational behavior is presented in which either the existence or absence of multinationals can be a nash equilibrium outcome the key determinant is the relationship between plant scale economies a force for geographic centralization and multiplant economies plus transport costs leading to multinationality the model predicts that multinational enterprise production arises when firm specific and transportation costs are large relative to plant scale economies the latter are both a technological and a strategic variable in the entry decision copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

violations of the gold points 1890 1908 evidence is presented that the gold standard system was inefficient in two ways 1 gold point violations sometimes persisted for long periods indicating that profit opportunities were not always eliminated quickly 2 following gold point violations gold occasionally flowed in unprofitable directions it is argued that government interference in the workings of the system was a source of these inefficiencies this suggests that the gold standard did not completely restrict the discretionary power of monetary authorities if present day gold standard advocates seek to eliminate discretionary monetary policy revival of the traditional gold standard is probably insufficient to attain their goal

an innovatory package for financial sector reforms in eastern european countries abstract this essay sees reform of the financial sector as the key to successful transition to a market economy the analysis generates the following practical proposals first the central bank should be endowed with strong independence accumulating the deposit insurance supervisory and lender of last resort functions second the central bank should host the payments system and impose gross settlement without credit lines in excess of required reserve balances it should also impose suitable capital requirements for credit exposure third universal banking should be accepted to improve corporate governance and to make a well functioning capital market less necessary fourth to reduce moral hazard and provide maximum flexibility an innovatory multi tier bank licensing is proposed fifth when government cannot borrow from the central bank borrowing will contribute to the development of securities markets whose other two pillars are privatisation and mortgage financing to alleviate the burden on public finance and maximise liquidity perpetuals assorted with suitable calls and puts are proposed

international coherence and mne performance we introduce the concept of international coherence ic to describe the degree of relatedness in a multinational enterprise mne we propose that ic hinges on the interplay of the relatedness between any two mne units and the linkages that tie them together linkages can be thought of as the often costly pipes that allow the content that is resources and information that define relatedness to flow we argue that greater ic increases the potential of an mne to generate economies by facilitating resource sharing and diffusion as well as learning and knowledge creation among mne units while controlling corresponding bureaucratic costs in turn this will lead to superior mne performance we also hypothesize that firms facing high levels of competition will have greater incentives to capitalize on ic to test our hypotheses we first estimate the relatedness between units by the revealed unit relatedness using data on nearly a half a million global investments by all public mnes worldwide we then use this information and data on 960 us mne units locations to estimate ic and find support for our hypotheses our results indicate the potential for ic as an important new facet of multinationality