Corporate risk and external sourcing: A study of Scandinavian multinational firm

相似文件 换一批

是 否 +2 论坛币

k人 参与回答

经管之家送您一份

应届毕业生专属福利!

求职就业群

赵安豆老师微信：zhaoandou666

经管之家联合CDA

送您一个全额奖学金名额~ !

立即领取

感谢您参与论坛问题回答

经管之家送您两个论坛币！

+2 论坛币

External sourcing from foreign suppliers is an important aspect of the
firm’s internationalization.
However, data on such sourcing is available from neither databases nor annual reports. Thus, the
corporate risk implications of such sourcing have not been studied previously. We obtain the necessary
data by surveying Scandinavian non-financial
firms. We
find that highly international
firms reduce
corporate risk by externally sourcing from foreign suppliers both compared to sourcing from own
production facilities abroad (due to superior
flexibility) and compared to domestic sourcing (due to offsetting
cash
flows). Our results are statistically significant, are economically meaningful, and have
important policy implications.

扫码加我 拉你入群

请注明：姓名-公司-职位

以便审核进群资格，未注明则拒绝

分享0 收藏0 回帖

关键词：Corporate sourcing External National Nation previously available databases important suppliers

2.1. Corporate risk
We measure corporate risk by stock return volatility. The value
of a stock is the discounted value of expected future cash
flows. We
use stock returns as opposed to accounting returns to measure
corporate risk because the former 1) are forward looking, 2) are
less influenced by general and
firm-specific accounting policies,
and 3) have a high frequency of data points. Furthermore, stock
returns constantly reflect aggregate changes in stock investors and
analysts’ beliefs about future cash
flows. These investors (and
analysts) may not always be correct in their assessments but they
back their opinions by money and thus have strong incentives to
evaluate the future of the
firm (including future risks) thoroughly.
Stock return volatility is affected by general market develop-
ments (systematic risk)12 and
firm-specific developments (idiosyncratic
risk) with the latter generally outweighing the former.
Goyal and Santa-Clara (2003)
find that the effect of idiosyncratic
risk constitutes almost 85% of the average stock variance measure.
Thus, our measure of risk predominantly measures risk related to
the specific
firm as opposed to general market developments.
Guay (1999) notes that stock return volatility measures equity
risk and not overall
firm risk. Most debt in our sample
firms is not
listed on exchanges and therefore we cannot observe volatility of
changes in its price. However, a stock is an option on the
firm’s
assets and as such its value is sensitive to the volatility of the
underlying asset. This justifies the use of stock return volatility as a
proxy for the volatility of the value of the
firm (e.g. Bulan, 2005).
We exclude
firms with negative book equity values to avoid stocks
that are likely to behave like out-of-the money options on
firm
value (i.e., correspondingly where the correlation between stock
value and
firm value is likely to be low).13