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Economic Performance of U.S. Multinational Agribusinesses: Foreign Direct Investment and Firm Strategy
Author(s) -
GarciaFuentes Pablo A.,
Ferreira Gustavo F. C.,
Kennedy P. Lynn
Publication year - 2012
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21316
Subject(s) - multinational corporation , foreign direct investment , agribusiness , economics , business , industrial organization , international trade , macroeconomics , agriculture , finance , ecology , biology
ABSTRACT This study borrows the theoretical framework developed by Lee and Habte‐Giorgis (2004) to empirically assess the sequential relationships between firm strategic factors, foreign direct investment (FDI) activity, and financial performance for a sample of U.S.‐based multinational agribusinesses. After using hierarchical regressions and path analysis, this study finds a positive direct effect of FDI on performance, a complementary effect between FDI and firm strategic factors (positive and significant interaction terms) on performance, and a positive effect of FDI on performance given a threshold for firm size. Specifically, it 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. These findings provide evidence that FDI activity is an important factor for U.S. agribusiness financial strength. [JEL classifications: F230, Q130, L250].