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Differences in Factor Structures between U.S. Multinational and Domestic Corporations: Evidence from Bilinear Paradigm Tests
Author(s) -
DeFusco Richard A.,
Philippatos George C.,
Choi Dosoung
Publication year - 1990
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.1990.tb00803.x
Subject(s) - multinational corporation , business , financial economics , bilinear interpolation , arbitrage , factor (programming language) , economics , econometrics , finance , statistics , mathematics , computer science , programming language
This research investigates the differences in factor structure between U.S. multinational and domestic corporations. We use a multifactor return generating process and investigate whether the constraints imposed by the arbitrage pricing theory are upheld. Our results indicate and domestic corporations are not significantly different. It does appear, however, that there are different prices attached to the risk of U.S. multinational and domestic firms.