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The comparative profitability of Canadian‐ and foreign‐controlled firms
Author(s) -
Shapiro Daniel M.
Publication year - 1983
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090040207
Subject(s) - multinational corporation , profitability index , corporation , business , foreign ownership , industrial organization , economics , finance , foreign direct investment , macroeconomics
This study analyzes factors determining the profitabilty of 750 of Canada's largest manufacturing firms, both domestic‐ and foreign‐controlled, over the period 1968‐1972. It is found that US‐controlled firms were more profitable than either Canadian‐ or other foreign‐controlled firms, when various firm‐ and industry‐specific factors are held constant. In addition, the higher was the degree of non‐resident (presumably American) ownership, the more profitable were US‐controlled firms. The reverse was true of other foreign firms. These results for US firms are consistent with the Hymer–Caves and internalization approaches to the multinational corporation. However, the results for other firms are not, thus suggesting that a ‘general’ theory of the multinational corporation has yet to be forwarded.