Uncertain Outcomes of Foreign Investment: Determinants of the Dispersion of Profits After Large Acquisitions

Tung-Jean Lee and Richard E Caves
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Tung-Jean Lee: Government of Singapore
Richard E Caves: Harvard University

Journal of International Business Studies, 1998, vol. 29, issue 3, 563-581

Abstract: When U.S. firms make large international acquisitions, the unpredicted component of their profits over the next five years increases with the relative size of the acquired firm, degree of product diversification, and reliance on R&D assets. The unpredicted component declines with the acquirer's size, experience, and previous profits. Transitory and longer-run unpredicted components are distinguished.© 1998 JIBS. Journal of International Business Studies (1998) 29, 563–581

Date: 1998
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