The effect of interaction between internationalization and strategic pursuance on the use of foreign currency denominated debt: in the context of Korean MNEs

• 발행기관: 동아시아경상학회
• 저자명: Soonsung Kim Jaiho Chung Myeong-Hyeon Cho
• 간행물 정보: 『East Asian Journal of Business Economics』Vol.6 No.3, 1~15쪽, 전체 15쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2018.09.30

영문 초록

Purpose – This study investigates the effect of MNEs’ characteristics on the use of foreign currency denominated debt in the context of Korean firms. This study examines the relationship between MNEs and the use of foreign debt focusing on the accessibility to the capital market in addition to the motive of hedging against foreign exchange exposure. Research design and methodology – Probit estimation is employed for estimating significant factors in determination of the use of foreign debt by firms. The dependent variable is a dummy variable to indicate whether a firm uses foreign debt or not at the end of 2004. Independent variables include foreign subsidiaries ratio, export to sale, R&D expenditure to sale, and credit rating. Results – The results show that the interaction between the level of internationalization represented by intraregional diversification and the strategic characteristics embedded in the region of entry affects the use of foreign debt. In case of a high level of diversification within the developing region with a strong pursuit of asset exploitation, MNEs are more likely to use foreign debt, whereas a high level of diversification within the developed region with a strong pursuit of asset seeking, MNEs are less likely to use foreign debt. Conclusions – The differences between MNEs in terms of intra-regional diversification, strategic orientation, and the accessibility to capital markets as well as the hedging motive affect the use of foreign debt.

목차

1. Introduction

2. Literature Reviewy and Hypotheses Development

3. Methodology

4. Results

5. Conclusion

키워드

Foreign Currency Denominated Debt Strategic Pursuance MNE Internationalization Intra-region Diversification Accessibility to Capital Market Foreign Exchange Exposure Hedge