| Popis: |
This study examines the effect of cultural differences (CD) between knowledge-based MNCS and their foreign subsidiaries on the firm value measured by financial ratios: ROA and ROE and Equity Multiplier. The projected findings are a nonlinear U-shaped effect with an initial negative impact on firm value, but results soon turn positive as the firm overcomes the initial shock. The initial reduction in firm value is reflected in the pricing the intangible assets of the MNCS. The more skilled MNC’s management becomes in managing CD or MNC corporate finance management, the more firm value improves over time. The paper outlines financial strategies the MNC should take if the projected findings of an initial reduction is empirical proven and the reducing firm value occurs. |
