Abstract
The recent financial instability of 2007–9 has been the result of less tight financial regulation enabling securitization that allowed and encouraged reckless credit expansion, leading to excessive leverage, supported in part by lax monetary policy (see Car mas si e t al., 2009; Ac har ya et al., 2009). A higher aggregate leverage, that is, the ratio of debt to equity, indicates in general a lower capacity to absorb losses and hence greater fragility. This chapter addresses two key questions:
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(1)
Which sources of financing contribute more in improving firmperformance, distinguishing multinational corporations (MNCs) from domestic firms covering 47 countries?
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(2)
Do multinationals transmit their performance to their affiliates across borders?
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Mallick, S., Yang, Y. (2014). Financing Patterns, Multinationals and Performance: Firm-level Evidence from 47 Countries. In: Temouri, Y., Jones, C. (eds) International Business and Institutions after the Financial Crisis. The Academy of International Business. Palgrave Macmillan, London. https://doi.org/10.1057/9781137367204_12
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DOI: https://doi.org/10.1057/9781137367204_12
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