Corporate governance and international business: Essays on multinational enterprises, ownership, finance and institutions

Abstract

This Thesis contributes to the literature on corporate governance in international business, with a focus on corporate ownership, corporate finance and institutions. It consists of five theoretical and empirical studies.

Three studies focus on corporate ownership and consider, respectively, whether state ownership shields multinational enterprises (MNEs) from host-country political risk, whether state and foreign ownership affect the ability of firms to reap benefits from internationalization, and whether state ownership affects foreign market entry decisions by petroleum sector MNEs.

A key finding from these studies is that state ownership implies certain political and financial advantages in the context of internationalisation that are not counteracted by corporate governance failures. The fourth study considers how MNEs finance their subsidiaries abroad, taking a novel transaction cost/internalization perspective on MNE subsidiary capital structure.

The study finds some evidence that capital structure at the subsidiary level is affected by factors such as specific knowledge assets. Finally, a fifth study investigates how institutional characteristics of host countries affect aggregate inward foreign direct investment in primary sectors. It finds that agricultural FDI is attracted by good institutions, while extractive FDI is not. As a whole, the Thesis demonstrates several ways in which governance has implications for international business, contributing to the growing literature in this field.