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THE CAPITAL‐STOCK DECISION OF SUBSIDIARIES
Author(s) -
KARDASZ STANLEY W.
Publication year - 1979
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1979.tb00298.x
Subject(s) - subsidiary , multinational corporation , stock (firearms) , capital structure , economics , business , capital call , financial economics , finance , financial capital , monetary economics , microeconomics , individual capital , engineering , mechanical engineering , debt , profit (economics)
This paper examines the financial effects of centralized control on the capital‐stock decision of the subsidiaries of a multinational enterprise. The approach adopted involves comparing the optimal capital stock of a firm before and after it has merged with another firm located in a different country. Using this method, it is shown that the analysis breaks down into a number of special cases.