TY - JOUR
T1 - The Survival of Foreign Subsidiaries and Domestically-owned Companies in Denmark, 1895 - 1995
AU - Thomsen, Steen
PY - 2000
Y1 - 2000
N2 - Over a long time period, 1895-1995, foreign subsidiaries in Denmark were found to have a lower survival-probability than domestically-owned manufacturing companies. The difference is highly significant and robust to control for size and industry effects. Since the number of foreign subsidiaries increased enormously throughout the period, lower relative survival rates are probably not an indicator of performance failure from the viewpoint of the parent companies. While low survival rates in foreign subsidiaries may be attributable to a number of factors (including differences between sales and production subsidiaries), this paper proposes governance differences between foreign subsidiaries and domestically-owned companies as a possible explanation. Consistent with hypothesized differences in corporate governance, domestically-owned companies are found to have higher equity reserves (equity/ assets ratios), which is found to have a positive impact on survival. For given equity - asset ratios no significant survival differences were found between the two groups.
AB - Over a long time period, 1895-1995, foreign subsidiaries in Denmark were found to have a lower survival-probability than domestically-owned manufacturing companies. The difference is highly significant and robust to control for size and industry effects. Since the number of foreign subsidiaries increased enormously throughout the period, lower relative survival rates are probably not an indicator of performance failure from the viewpoint of the parent companies. While low survival rates in foreign subsidiaries may be attributable to a number of factors (including differences between sales and production subsidiaries), this paper proposes governance differences between foreign subsidiaries and domestically-owned companies as a possible explanation. Consistent with hypothesized differences in corporate governance, domestically-owned companies are found to have higher equity reserves (equity/ assets ratios), which is found to have a positive impact on survival. For given equity - asset ratios no significant survival differences were found between the two groups.
UR - https://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=110992357316902&rft.object_portfolio_id=&svc.holdings=yes&svc.fulltext=yes
U2 - 10.1080/03585522.2000.10419830
DO - 10.1080/03585522.2000.10419830
M3 - Journal article
VL - 48
SP - 72
EP - 86
JO - Scandinavian Economic History Review
JF - Scandinavian Economic History Review
SN - 0358-5522
IS - 2
ER -