Economic Performance of U.S. Multinational Manufacturing Firms: The Linkages between Foreign Direct Investment and Firm Strategy | Zendy

Pablo A. GarciaFuentes | Zendy; Gustavo F.C. Ferreira | Zendy; P. Lynn Kennedy | Zendy; Felipe Perez | Zendy

Open Access

Economic Performance of U.S. Multinational Manufacturing Firms: The Linkages between Foreign Direct Investment and Firm Strategy

Author(s) -

Pablo A. GarciaFuentes,

Gustavo F.C. Ferreira,

P. Lynn Kennedy,

Felipe Perez

Publication year - 2016

Publication title -

international business research

Language(s) - English

Resource type - Journals

eISSN - 1913-9012

pISSN - 1913-9004

DOI - 10.5539/ibr.v10n1p240

Subject(s) - foreign direct investment , multinational corporation , business , industrial organization , sample (material) , capital intensity , export performance , international economics , human capital , economics , market economy , finance , chemistry , chromatography , macroeconomics

This study assesses the sequential relationships between firm strategic factors, foreign direct investment (FDI) activity, and financial performance for a sample of U.S.-based multinational manufacturers. After using hierarchical regressions and path analysis, this study finds an unambiguously positive direct effect of FDI on performance, and a complementary effect between FDI and firm strategy on performance. Specifically, this study provides insights about the direct effect of FDI on performance, as well as about the joint effect of firm size and FDI, marketing intensity and FDI, and capital intensity and FDI on performance. Finally, these findings present evidence that FDI activity is an important factor for U.S. manufacturers’ financial strength.

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