A Note on Return on Foreign Assets and Foreign Presence for UK Multinationals

Alan Rugman, George Yip and Saliya Jayaratne
Additional contact information
George Yip: Capgemini Consulting
Saliya Jayaratne: Said Business School

No 2007-10, Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy

Abstract: Within the context of the international business literature on multinationality and performance we develop new data on the foreign presence and performance of large UK multinational enterprises (MNEs). There are 32 UK MNEs for which we can obtain data on both their degree of multinationality (measured by the ratio of foreign-to-total sales, F/T) and on their performance. Here, in addition to the traditional overall performance of the firm, shown as return on total assets (ROTA), we use new data on the return on foreign assets (ROFA). We conduct analytical work to show the positioning of the UK MNEs in the ROFA and F/T space and provide regression results showing a linear relationship between multinationality and performance, using the new ROFA metric.

Keywords: UK multinationals; return on foreign assets; foreign-to-total sales; performance; multinational strategy (search for similar items in EconPapers)
Date: 2007
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Forthcoming in British Journal of Management

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