Open AccessWhat Causes the Divestment of Multinational Companies in China? A Subsidiary Perspective
Author(s) -
Li Ren,
Zhenlin Liu
Publication year - 2015
Publication title -
journal of business theory and practice
Language(s) - English
Resource type - Journals
eISSN - 2372-9759
pISSN - 2329-2644
DOI - 10.22158/jbtp.v3n1p81
Subject(s) - divestment , multinational corporation , china , profitability index , business , foreign direct investment , debt , monetary economics , economics , finance , political science , macroeconomics , law
This paper examines the causes of MNCs’ divestments in China. The MNCs’ profitability, market shares and productivities are negatively related to the possibility of divestment, while the MNCs’ debts are positively related to the possibility that foreign investments are divested. These results suggest that divestments are affected by MNCs’ performances, and their performances are endogenous shocks for divestment.