Knowledge that Transforms

This paper shows how differences across countries of 1) inflation rates, 2) consumption baskets of investors, and 3) investment opportunity sets of investors matter when one applies capital asset pricing models in an international setting. In particular, the fact that countries differ is shown to affect the portfolio held by investors, the equilibrium expected returns of risky assets, and the financial policies of firms.

This article examines the implications of transnational data flow constraints for international business. The need for a free flow of information across national boundaries—facilitating international business and reducing costs for multinational corporations—is discussed. Although both large and small firms are affected by transnational data constraints, companies that are managed in a decentralized fashion are affected to a lesser degree. Economic protectionism has emerged as a major reason for regulating transnational data flow by nation states.

The efficient operation of a multinational corporation is contingent upon the availability of numerous—technology, capital, know-how, and people. In this paper, the argument is made that human power is a key ingredient to the successful operation of a multinational, without which all the other aforementioned resources could not be effectively and efficiently utilized or transferred from corporate headquarters to the various subsidiaries in the world. Hence, there is a need for multinationals to devote more attention to human resource planning, which is viewed as part of the overall planning and control process in a firm. The paper compares and contrasts the human resource development programs between a sample of U.S. and Japanese multinationals, and discusses the implications for U.S. multinationals.

This paper shows the distorting effects of different tax regulations on the effective absolute and relative costs of long-term borrowing in different currencies. In particular, if expected borrowing costs are equal before tax, then the process of minimizing expected after-tax borrowing costs generally involves borrowing the weakest currency.

This paper examines the type and level of control exercised by the parent headquarters of 50 U.S., UK, and European multinational corporations over their foreign subsidiaries. Patterns of control in the 3 national groups differ in significant ways, and these differences seem to have important implications for other characteristics of a company's organization design and managerial style.

This paper presents data collected by structured interviews concerning how external environment analysis and strategic planning are related in major U.S.-based multinational corporations. The research was also undertaken to ascertain why and the extent to which firms have formally institutionalized the external environmental functions since the Iranian revolution.