Do Cross-Border Operation Influence Continental and Island-Type Firms’ Profitability and Risk

• Main Authors: Ling-Hsuan Chuang, 莊凌軒
• Other Authors: 戴錦周
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/uj3zk8

碩士 === 臺中技術學院 === 企業管理系事業經營碩士班 === 99 === The objective of the study is to investigate how the cross-border operation influenced continental-type and island-type firms’ profitability and risk. The cross-border operation is measured by the foreign sales ratio and the foreign assets ratio. The data source is the World Investment Report, from 2003 to 2008, published by United Nations. A simultaneous equation system was established to analyze the reaction relationship between the firms’ profitability and risk. The empirical results estimated by the three stage least squares method show that the foreign sales ratio yielded a positive effect on the profitability of firms while the foreign assets ratio did not have a significant effect. In the equation of risk, the foreign sales had a significant impact on firms’ risk, but the foreign assets did not. As for the results about the country type, the cross-border operation would enhance continental firms’ profitability, while effects of the foreign sales and foreign assets were not significant. Finally, both foreign sales and foreign assets did not have significant effects on either continental-type or island-type firms’ risk.