Kallunki, J.-P., J. Larimo & S. Pynnönen (1998). Value creation in foreign direct investments. Proceedings of the University of Vaasa. Discussion Papers 243, 34 p.

This study examines shareholder wealth creation in foreign manufacturing investments. In addition to empirically examining the wealth effects of investing firms, the study examines the impact of several investing firms and investment related factors on the wealth effects. The data of the study is based on 84 foreign investments made by Finnish firms between 1985 and 1996. The results indicate that, on average, foreign direct investments have significant value creating effects for investing firm shareholders, i.e., value creation of foreign direct investments generally prove to be a fact. However, any of specific features of the investment, such as type, form or target country of the investment, did not show any divergent value creation effects.

Kallunki, Juha-Pekka, University of Oulu, P.O.Box 444, FIN-90571, Oulu Larimo, Jorma & Seppo Pynnönen, University of Vaasa, P.O.Box 700, FIN-65101 Vaasa, Finland