Gaining access to foreign credit information

Article Abstract:

Many US firms hesitate to enter into profitable international deals because they are insecure about credit data they can obtain about foreign buyers. US credit executives seeking useful international credit information can turn to local credit reporting agencies, which tend to reflect their national culture, but whose accuracy and completeness vary widely. It is common practice to request a potential customer in a foreign nation to provide a balance sheet or financial report. US credit reporting agencies that collect data from local reporting agencies in the customer's country may be able to provide information not available directly from overseas buyers. Major US, Japanese, and European banks represent another source of credit information. Details are provided on what a good credit report should include.

Finance, International business enterprises, Multinational corporations, Credit

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Shareholder Returns to USA Aquired Firms in Foreign and Domestic Aquisitions

Article Abstract:

In a merger, a company's bid should reflect any perceived benefit the merger might have to shareholders. This benefit should also, according to theory, be represented by residuals to shareholders. Since diversification should reduce risk and increase profits, overseas firms through international diversification should enjoy a competitive advantage when competing with domestic firms. A statistical study is done to verify this hypothesis. Analysis of several United States mergers shows that overseas firms do pay higher residuals to shareholders, but the difference between domestic residuals is not statistically significant. Therefore, overseas firms probably do not enjoy a competitive advantage.

Acquisitions and mergers

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Corporate leverage and the distribution of equity returns

Article Abstract:

A study of operating leverage as a determinant of non-normality in equity returns revealed that this increases unconditional mean, variance, skewness and kurtosis of short holding-period returns. This was concluded following evidence of negative relationship between quarterly returns and lagged quarterly sales as well as between absolute value of return deviation from sample mean and lagged quarterly sales.

Research, Return on investment, Leverage (Finance), Leverage, Sales, Rate of return

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