MNE financial flexibility and operational performance: Evidence from Taiwan

Hsien Chang Kuo*, Jin-Li Hu, Chia Ling Hsu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This research constructs a framework to measure a multinational enterprise's financial flexibility containing three diemnsions: (1) operational ability, (2) financing ability, and (3) liquidity ability. We then build a panel dataset of 100 information technology firms and 167 non-information technology firms in Taiwan during 1999-2003. Our major findings are as follows: (1) Export ratio, debts from foreign countries, spontaneous short-term debt ratio, and quick ratio have significantly positive effects on operational performance. (2) Foreign assets ratio has a significantly negative effect on operational performance. (3) Equity from foreign countries, mainland China investment, and external short-term debt ratio have no significant effects on operational performance.

Original languageEnglish
Pages (from-to)1-15
Number of pages15
JournalGlobal Journal of Flexible Systems Management
Volume7
Issue number3-4
StatePublished - 1 Jul 2006

Keywords

  • Financing ability
  • Liquidity ability
  • Operational ability

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