INTERNATIONALIZATION OF COMPANIES AND WEALTH OF SHAREHOLDERS

Cláudio Francisco Rezende, Vinicius Silva Pereira, Antonio Sergio Torres Penedo

Abstract


The approach to internationalization in the economic and business literature has been accentuated since the second half of the twentieth century, a time of intensification of the globalization process. The present paper intends to be a challenge to fill a still incipient gap in the finance literature, that is, to incorporate the degree of internationalization in the context of wealth creation for the shareholder and working capital. The objective of this study is to investigate the relationship between the internationalization of companies and the wealth of its shareholders, based on the work of Faulkender and Wang (2006). The sample selection was held at the Economática Database considering Brazilian companies listed on the BM&FBOVESPA. The criterion used to identify a multinational company was the measure of DOI internationalization (UNCTAD 1995), used by the Fundação Dom Cabral. The period of analysis considered in this work was from 2006 to 2013. We used regression with panel data. It was found that the higher the degree of internationalization, greater the added value to its shareholders. This result suggests that the decision to internationalize can increase shareholder wealth and thus should be pursued by the managers.

Keywords


internationalization, shareholder wealth, Brazilian companies.

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DOI: https://doi.org/10.24023/FutureJournal/2175-5825/2020.v12i1.440

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