TITLE

SHOULD THE FOREIGN AFFILIATE REMIT DIVIDENDS OR REINVEST?

AUTHOR(S)
Obersteiner, Erich
PUB. DATE
March 1973
SOURCE
Financial Management (1972);Spring73, Vol. 2 Issue 1, p88
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The article focuses on the use of linear programming models to analyze exchange risk management of multinational corporations. Foreign investment is exposed to significantly greater environmental uncertainty than domestic investment and requires special analysis and evaluation. The remittance of foreign funds as dividends poses problems of taxation, remittance restrictions, transfer costs and reinvestment. Multinational financial decision-makers, therefore, face the dilemma of incurring the costs of funds remittances or of accepting the particular uncertainties of foreign investment in host countries. The problem is a recurring one and a resolution must be found. The characteristics of the multinational corporate system referred to in this paper are primarily those of a large, internationally operating company head-quartered in the U.S. and owning one or more subsidiaries abroad. The model evaluates the desirability of foreign dividend remittances in relation to foreign investment but does not fully reflect the possibility of remitting foreign funds to cash centers or investment alternatives in countries other than the parent's home country. In addition, the possibility of remitting funds in the form of royalties, fees, loans or transfer prices is not reflected in the suggested decision model.
ACCESSION #
5443607

 

Related Articles

  • chapter 3: Business Environment.  // Poland Business Forecast Report;2005 2nd Quarter, p19 

    This article reports on Poland's political and economic transition. While the business environment is supported by sound legal, economic and political institutions, in accordance with Poland's status as an important strategic target for foreign investment, there are concerns that the extent of...

  • Conflicts Between Host Countries and the Multinational Enterprise. Mason, R. Hal // California Management Review;Fall74, Vol. 17 Issue 1, p5 

    Direct foreign investment is desired for its technology and ability to bring about intertemporal reallocation of resources. However, it also redistributes income from nationals to foreigners. Where this redistribution is considered to exceed the benefits of direct foreign investment,...

  • Analysis on Influence and Inspiration of the Localization Strategy of Multinational Corporations in China. Jing Sun // Business Management & Strategy (BMS);2012, Vol. 3 Issue 1, p87 

    Since the beginning of reform and opening up, mass of transnational corporations into China. Faced with their home countries of different political systems, economic systems, and cultural practices, transnational corporations had to integrate with Chinese political, economic and cultural...

  • Foreign Investment Climate.  // East Timor Review;2013, p91 

    The article presents an overview of the foreign investment climate in East Timor, located in Southeast Asia, on the southernmost edge of the Indonesian archipelago. The Portuguese colonized the island in mid-century. Imperial Japan occupied East Timor from 1942 to 1945, but East Timor declared...

  • Evolution of GDP and Foreign Investments. ANGHELACHE, Constantin; ANGHELACHE, Gabriela Victoria; ANGHEL, Mădălina Gabriela; DINU, Adina Mihaela // Romanian Statistical Review;2013, Issue Sup, p34 

    One of the main aspects analyzed in this paper is the quarterly evolution of the seasonally adjusted GDP comparatively with the corresponding quarter of the previous year. As for the impact of foreign investments, year 2012 was a year when a series of sectors of activity kept on getting...

  • ECONOMICS AND POLITICS OF FOREIGN DIRECT INVESTMENT. IS IT BENEFICIAL FOR THE RECIPIENT COUNTRIES? Chrzanowski, Ignacy H. // Research Papers of the Wroclaw University of Economics / Prace N;2012 Part 1, Issue 267, p96 

    The paper covers the issue of foreign direct investment (or FDI). Starting with a brief overview of FDI in the principal groups of countries it further focuses on factors that affect FDI in various countries. Two cases are covered in more detail, viz. FDI in the U.S. and in Poland. The main...

  • The tax sensitivity of foreign direct investment: Evidence from firm-level panel data. Cummins, Jason G.; Hubbard, R. Glenn // NBER Reporter;Spring94, p52 

    This article presents an abstract of the NBER Working Paper "The tax sensitivity of foreign direct investment: Evidence from firm-level panel data," by Jason G. Cummins and R. Glenn Hubbard.

  • LOCATION DETERMINANTS OF MNE ACTIVITY IN THE MANUFACTURING INDUSTRY IN SOUTH EAST EUROPE COUNTRIES. Culahovic, Besim; Mehic, Eldin; Agic, Emir // Conference Proceedings: International Conference of the Faculty ;2008, p1 

    The article discusses a study regarding location determinants of multinational enterprise (MNE) activity in the manufacturing industry in South East European (SEE) countries. It explores the issues regarding the gap in the debate on Foreign Direct Investment (FDI) in the SEE countries. It...

  • ASSESSING THE PERFORMANCE OF FOREIGN DIRECT INVESTMENT: THE EFFECT OF MOTIVES FOR ENTRY. Geng Cui; Hon-Kwong Lui // AMA Winter Educators' Conference Proceedings;2001, Vol. 12, p283 

    As global expansion by multinational corporations (MNCs) has become a driving force behind cross-border capital flow, performance of foreign direct investment has become an important dependent variable in recent studies of MNCs. Among the environment factors, many researchers have examined many...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics