In a study of the effect of international acquisitions on the stock prices of U.S.firms,U.S.acquiring firms with information-based intangible assets experience a significantly positive stock price reaction upon foreign acquisition.
A)This is consistent with the finding that the market value of the firm is positively related to its multinationality because of the firm's intangible assets,such as R&D capabilities,with public good nature.
B)It is not the multinationality per se that contributes to the firm's value.
C)Their empirical findings support the (forward-)internalization theory of FDI.
D)all of the options

Question

Quizplus · Accepted Answer

The statement includes multiple claims, all of which are supported by the empirical findings of the study. Therefore, the correct answer is D) all of the options. Specifically, the study found that U.S. acquiring firms with information-based intangible assets benefit from international acquisitions through a positive stock price reaction. This result is consistent with the idea that the multinationality of a firm can enhance its value by leveraging its intangible assets with public good nature. However, the study clarifies that it is not the multinationality per se that contributes to the firm's value, but rather the specific assets and capabilities that the firm possesses. Additionally, the finding supports the idea of the (forward-)internalization theory of FDI, which proposes that firms engage in cross-border transactions to access and exploit specific assets and capabilities that are not available in the local market.

In a Study of the Effect of International Acquisitions on the Stock