Fritz Foley is a Professor in the Finance area at Harvard Business School. He is also a Faculty Research Fellow in the National Bureau of Economic Research’s Corporate Finance and International Trade and Investment Programs and an Associate Editor of the Journal of International Economics. Professor Foley teaches the first-year course Field Immersion Experiences for Leadership Development and in various HBS Executive Education programs.
Professor Foley’s research focuses on international corporate finance with a particular emphasis on the activities of multinational firms. He has investigated the use of international joint ventures, the determinants of multinational affiliate capital structure and dividend repatriations, the advantages associated with internal capital and labor markets, the impact of capital controls on multinationals, and the effects of stock market valuations on foreign direct investment. His work on how intellectual property rights influence international technological transfers has been funded by grants from the National Science Foundation, the World Bank, and the Asian Development Bank. His academic articles have appeared in several journals including The Journal of Finance, the Journal of Financial Economics, the Journal of Public Economics, the National Tax Journal, the Review of Financial Studies, and the Quarterly Journal of Economics.
Prior to joining HBS, Professor Foley taught at the University of Michigan Business School. He received a Ph. D. in Business Economics from Harvard University and a B.A. in Ethics, Politics, and Economics from Yale University. Professor Foley has also worked as a strategy consultant at Monitor Company and conducted research on multinational firms in the apparel export sector as a Fulbright Scholar in Sri Lanka.
Publications
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Article
| Management Science
| Forthcoming
Ethnic Innovation and U.S. Multinational Firm Activity
C. Fritz Foley and William R. Kerr
This paper studies the impact that immigrant innovators have on the global activities of U.S. firms by analyzing detailed data on patent applications and on the operations of the foreign affiliates of U.S. multinational firms. The results indicate that increases in the share of a firm's innovation performed by inventors of a particular ethnicity are associated with increases in the share of that firm's affiliate activity in their native countries. Ethnic innovators also appear to facilitate the disintegration of innovative activity across borders and to allow U.S. multinationals to form new affiliates abroad without the support of local joint venture partners. Thus, this paper points out that immigration can enhance the competitiveness of multinational firms.
Keywords: foreign direct investment;
Technology Transfer;
patents;
innovation;
Research and Development;
Ethnic Networks;
diasporas;
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Article
| Financial Management
| Forthcoming
Agency Costs, Mispricing, and Ownership Structure
Robin Greenwood, C. Fritz Foley and Sergey Chernenko
Standard theories of corporate ownership assume that because markets are efficient, insiders ultimately bear all agency costs that they create and therefore have a strong incentive to minimize conflicts of interest with outside investors. We argue that if equity is overvalued, however, mispricing offsets agency costs and can induce a controlling shareholder to list equity. Higher valuations may support listings associated with greater agency costs. We test the predictions that follow from this idea on a sample of publicly listed subsidiaries in Japan. Subsidiaries in which the parent sells a larger stake and subsidiaries with greater scope for expropriation by the parent firm are more overpriced at listing, and minority shareholders fare poorly after listing as mispricing corrects. Parent firms often repurchase subsidiaries at large discounts to valuations at the time of listing and experience positive abnormal returns when repurchases are announced.
Keywords: Business and Shareholder Relations;
Ownership;
Conflict of Interests;
Investment;
Valuation;
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Article
| National Tax Journal
|
Tax Policy and the Efficiency of U.S. Direct Investment Abroad
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Deferral of U.S. taxes on foreign source income is commonly characterized as a subsidy to foreign investment, as reflected in its inclusion among "tax expenditures" and occasional calls for its repeal. This paper analyzes the extent to which tax deferral and other policies inefficiently subsidize U.S. direct investment abroad. Investments are dynamically inefficient if they consistently generate fewer returns to investors than they absorb in new investment funds. From 1982 to 2010, repatriated earnings from foreign affiliates exceeded net capital investments by $1.1 trillion in 2010 dollars; and from 1950 to 2010, repatriated earnings and net interest from foreign affiliates exceeded net equity investments and loans by $2.1 trillion in 2010 dollars. By either measure, cash flows received from abroad exceeded 160% of net investments, implying that foreign investment over these periods was dynamically efficient.
Keywords: Policy;
Taxation;
Performance Efficiency;
Foreign Direct Investment;
Investment Funds;
Investment Return;
Business Earnings;
Equity;
Financing and Loans;
Cash Flow;
Capital;
United States;
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Article
| Journal of Finance
|
Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act
Dhammika Dharmapala, C. Fritz Foley and Kristin J. Forbes
This paper analyzes the impact of the Homeland Investment Act of 2004, which provided a one-time tax holiday for the repatriation of foreign earnings and thereby reduced the cost to U.S. multinationals of accessing a source of internal capital. Lawmakers and lobbyists justified its passage by arguing that it would alleviate financial constraints. This paper's results indicate that repatriations did not lead to an increase in domestic investment, domestic employment, or R&D—even for the firms that appeared to be financially constrained or lobbied for the holiday. Instead, estimates indicate that a $1 increase in repatriations was associated with a $0.60 to $0.92 increase in payouts to shareholders—despite regulations stating that such expenditures were not a permitted use of repatriations qualifying for the tax holiday. The results indicate that U.S. multinationals were not financially constrained and were reasonably well governed. The fungibility of money appears to have undermined the effectiveness of the regulations.
Keywords: Investment;
Performance Effectiveness;
Code Law;
Taxation;
Cost;
Capital;
Financial Strategy;
Research and Development;
Governing Rules, Regulations, and Reforms;
Business and Shareholder Relations;
United States;
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Journal Article
| Review of Economics and Statistics
|
Welfare Payments and Crime
C. Fritz Foley
Analysis of daily reported incidents of major crimes in twelve U.S. cities reveals an increase in crime over the course of monthly welfare payment cycles. This increase reflects an increase in crimes that are likely to have a direct financial motivation like burglary, larceny-theft, motor vehicle theft, and robbery, as opposed to other kinds of crime like arson, assault, homicide, and rape. Temporal patterns in crime are observed in jurisdictions in which disbursements are focused at the beginning of monthly welfare payment cycles and not in jurisdictions in which disbursements are relatively more staggered. These findings indicate that welfare beneficiaries consume welfare-related income quickly and then attempt to supplement it with criminal income.
Keywords: Crime and Corruption;
Motivation and Incentives;
Welfare or Wellbeing;
United States;
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Journal Article
| Journal of International Economics
|
Does Intellectual Property Rights Reform Spur Industrial Development?
Lee G. Branstetter, Ray Fisman, C. Fritz Foley and Kamal Saggi
An extensive theoretical literature generates ambiguous predictions concerning the effects of intellectual property rights (IPR) reform on industrial development. The impact depends on whether multinational enterprises (MNEs) expand production in reforming countries and the extent of decline in imitative activity. We examine the responses of U.S.-based MNEs and domestic industrial production to a set of IPR reforms in the 1980s and 1990s. Following reform, MNEs expand the scale of their activities. MNEs that make extensive use of intellectual property disproportionately increase their use of inputs. There is an overall expansion of industrial activity after reform, and highly disaggregated trade data indicate higher exports of new goods. These results suggest that the expansion of multinational activity more than offsets any decline in imitative activity.
Keywords: Development Economics;
Foreign Direct Investment;
Multinational Firms and Management;
Governing Rules, Regulations, and Reforms;
Intellectual Property;
Rights;
Production;
Expansion;
United States;
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Journal Article
| Review of Financial Studies
|
The Evolution of Corporate Ownership after IPO: The Impact of Investor Protection
C. Fritz Foley and Robin Greenwood
We use firm-level data from 34 countries covering the 1995-2006 period to analyze how the characteristics of public markets shape the process by which firms become widely held. Firms in all countries in the sample tend to have concentrated ownership at the time they go public. Decreases in ownership concentration are more likely for firms in countries with stronger protections for minority shareholders, lower block premia, and more liquid stock markets. In these countries, firms are more likely to issue equity when investment opportunities are high, becoming widely held in the process. We find scant evidence, however, that changes in percentage blockholding forecast future returns, inconsistent with market timing theories. Our results suggest that liquidity-based theories of corporate ownership may have been underemphasized in previous cross-country studies.
Keywords: Financial Liquidity;
Business History;
Market Timing;
Going Public;
Business and Government Relations;
Business and Shareholder Relations;
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Article
| WIPO Journal
|
Has the Shift to Stronger Intellectual Property Rights Promoted Technology Transfer, FDI, and Industrial Development?
Lee Branstetter, C. Fritz Foley and Kamal Saggi
This article reviews recent research conducted by the authors that finds that intellectual property rights reform increases technology transfers, foreign direct investment inflows, and industrial development. It also places the findings of this work in the broader context of the literature.
Keywords: Intellectual Property;
Rights;
Technology;
Body of Literature;
Foreign Direct Investment;
Industry Growth;
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Article
| Quarterly Journal of Economics
|
Multinational Firms, FDI Flows and Imperfect Capital Markets
Pol Antras, Mihir Desai and C. Fritz Foley
Keywords: Business Ventures;
Capital;
Markets;
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Journal Article
| American Economic Journal: Economic Policy
|
Domestic Effects of the Foreign Activities of U.S. Multinationals
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Do firms investing abroad simultaneously reduce their domestic activity? This paper analyzes the relationship between the domestic and foreign operations of American manufacturing firms between 1982 and 2004 by instrumenting for changes in foreign operations with GDP growth rates of the foreign countries in which they invest. Estimates produced using this instrument indicate that 10% greater foreign investment is associated with 2.6% greater domestic investment, and 10% greater foreign employee compensation is associated with 3.7% greater domestic employee compensation. These results do not support the popular notion that expansions abroad reduce a firm's domestic activity, instead suggesting the opposite.
Keywords: Foreign Direct Investment;
Global Range;
Local Range;
Multinational Firms and Management;
Compensation and Benefits;
Operations;
Manufacturing Industry;
United States;
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Article
| Review of Financial Studies
|
Multinationals as Arbitrageurs? The Effect of Stock Market Valuations on Foreign Direct Investment
Malcolm Baker, C. Fritz Foley and Jeffrey Wurgler
Empirical evidence of imperfect integration across world capital markets suggests a role for cross-border arbitrage by multinationals. Consistent with multinational arbitrage as a determinant of foreign direct investment (FDI) patterns, we find that FDI flows increase sharply with source-country stock market valuations—particularly the component of valuations that is predicted to revert the next year, and particularly in the presence of capital account restrictions that limit other mechanisms of cross-country arbitrage. The results suggest the existence of a cheap financial capital channel in which FDI flows reflect, in part, the use of relatively low-cost capital available to overvalued parents in the source country.
Keywords: Multinational Firms and Management;
Financial Markets;
Foreign Direct Investment;
Valuation;
Capital Markets;
Cross-Cultural and Cross-Border Issues;
Cost;
Forecasting and Prediction;
Capital;
Stocks;
Integration;
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Journal Article
| Review of Financial Studies
|
Financial Constraints and Growth: Multinational and Local Firm Responses to Currency Crises
Mihir A. Desai, C. Fritz Foley and Kristin Forbes
This paper examines how financial constraints and product market exposures determine the response of multinational and local firms to sharp depreciations. U.S. multinational affiliates increase sales, assets, and investment significantly more than local firms during, and subsequent to, depreciations. Differing product market exposures do not explain these differences in performance. Instead, a differential ability to circumvent financial constraints is a significant determinant of the observed differences in investment responses. Multinational affiliates also access parent equity when local firms are most constrained. These results indicate another role for foreign direct investment in emerging markets—multinational affiliates expand economic activity during currency crises when local firms are most constrained.
Keywords: Economic Growth;
Financial Crisis;
Currency;
Private Equity;
Foreign Direct Investment;
Multinational Firms and Management;
Emerging Markets;
United States;
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Article
| Journal of Financial Economics
|
Capital Structure with Risky Foreign Investment
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Capital;
Risk and Uncertainty;
Foreign Direct Investment;
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Article
| Journal of Financial Economics
|
Why Do Firms Hold So Much Cash? A Tax-Based Explanation
C. Fritz Foley, Jay Hartzell, Sheridan Titman and Garry Twite
Keywords: Business Ventures;
Cash;
Taxation;
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Article
| Financial Management
|
Dividend Policy inside the Multinational Firm
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Profit;
Policy;
Business Ventures;
Citation: Desai, Mihir A., C. Fritz Foley, and James R. Hines Jr. " Dividend Policy inside the Multinational Firm." Financial Management 36, no. 1 (spring 2007). (Winner of Pearson/Prentice Hall Prize for Best Paper in Financial Management For the best paper published in Financial Management in the previous two years presented by Financial Management Association.)
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Article
| Survey of Current Business
|
The Internal Markets of Multinational Firms
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Markets;
Business Ventures;
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Article
| Journal of Public Economics
|
The Demand for Tax Haven Operations
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Taxation;
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Article
| Economics Letters
|
Do Tax Havens Divert Economic Activity?
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Taxation;
Economics;
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Article
| Quarterly Journal of Economics
|
Do Stronger Intellectual Property Rights Increase International Technology Transfer? Empirical Evidence from U.S. Firm-Level Panel Data
Lee G. Branstetter, Raymond Fisman and C. Fritz Foley
Keywords: Intellectual Property;
Rights;
Technology;
Information;
Data and Data Sets;
United States;
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Article
| Survey of Current Business
|
Taxation and Multinational Activity; New Evidence, New Interpretations
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Taxation;
Information;
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Article
| Review of Financial Studies
|
Capital Controls, Liberalizations, and Foreign Direct Investment
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Foreign Direct Investment;
Capital;
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Article
| American Economic Review
|
Foreign Direct Investment and the Domestic Capital Stock
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Foreign Direct Investment;
Capital;
Stocks;
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Article
| Journal of Public Economics
|
Foreign Direct Investment in a World of Multiple Taxes
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Foreign Direct Investment;
Taxation;
Citation: Desai, Mihir A., C. Fritz Foley, and James R. Hines Jr. " Foreign Direct Investment in a World of Multiple Taxes." Journal of Public Economics 88, no. 12 (December 2004): 2727–2744. (This paper is a revised version of HBS Working Paper 03-047 and NBER Working Paper no. 8840.)
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Article
| Journal of Finance
|
A Multinational Perspective on Capital Structure Choice and Internal Capital Markets
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Global Range;
Perspective;
Capital;
Decision Choices and Conditions;
Markets;
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Article
| Journal of Financial Economics
|
The Costs of Shared Ownership: Evidence From International Joint Ventures
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Cost;
Ownership;
Joint Ventures;
Global Range;
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Journal Article
| Harvard Business Review
|
Venture Out Alone
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Citation: Desai, Mihir A., C. Fritz Foley, and James R. Hines Jr. " Venture Out Alone." Harvard Business Review 82, no. 3 (March 2004).
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Article
| National Tax Journal
|
Repatriation Taxes and Dividend Distortions
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Taxation;
Profit;
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Article
| World Development
|
Impediments to Promoting Backward Linkages from the Garment Industry in Sri Lanka
Saman Kelegama and C. Fritz Foley
Keywords: Apparel and Accessories Industry;
Sri Lanka;
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Chapter
| Costs and Benefits of Regional Economic Integration in Asia
| 2011
Regional Trade Integration and Multinational Firm Strategies
Pol Antras and C. Fritz Foley
This paper analyzes the effects of the formation of a regional trade agreement on the level and nature of multinational firm activity. We examine aggregate data that captures the response of U.S. multinational firms to the formation of the ASEAN free trade agreement. Observed patterns guide the development of a model in which heterogeneous firms from a source country decide how to serve two foreign markets. Following a reduction in tariffs on trade between the two foreign countries, the model predicts growth in the number of source-country firms engaging in foreign direct investment, growth in the size of affiliates that are active in reforming countries both before and after the tariff reduction, and an increase in the extent to which the sales of affiliates in reforming countries are directed towards other reforming countries. Analysis of firm-level responses to the creation of the ASEAN free trade agreement yields results that are consistent with these predictions.
Keywords: Forecasting and Prediction;
Trade;
Foreign Direct Investment;
Multinational Firms and Management;
Globalized Markets and Industries;
Data and Data Sets;
Agreements and Arrangements;
United States;
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Chapter
| China's Growing Role in World Trade
| 2010
Facts and Fallacies about U.S. FDI in China
Lee Branstetter and C. Fritz Foley
Despite the rapid expansion of U.S.-China trade ties, the increase in U.S. FDI in China, and the expanding amount of economic research exploring these developments, a number of misconceptions distort the popular understanding of U.S. multinationals in China. In this paper, we seek to correct four common misunderstandings by providing a statistical portrait of several aspects of U.S. affiliate activity in the country and placing this activity in its appropriate economic context.
Keywords: Expansion;
Trade;
Foreign Direct Investment;
Mathematical Methods;
Multinational Firms and Management;
China;
United States;
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Chapter
| NBER International Seminar on Macroeconomics
| 2006
The Comovement of Returns and Investment within International Firms
Mihir A. Desai and C. Fritz Foley
Keywords: Multinational Firms and Management;
Investment Return;
Foreign Direct Investment;
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Chapter
| Foreign Direct Investment in the Real and Financial Sector of Industrial Countries
| 2003
Chains of Ownership, Regional Tax Competition, and Foreign Direct Investment
Mihir A. Desai, C. Fritz Foley and James R. Hines Jr.
Keywords: Ownership;
Taxation;
Foreign Direct Investment;
Globalized Economies and Regions;
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Working Paper
| 2012
Trade Credit and Taxes
Mihir Desai, C. Fritz Foley and James R. Hines Jr.
This paper analyzes the extent to which firms use trade credit to reallocate capital in response to tax incentives. Tax-induced differences in pretax returns encourage the use of trade credit to reallocate capital from firms facing low tax rates to those facing high tax rates. Evidence from the worldwide operations of U.S. multinational firms indicates that affiliates in low-tax jurisdictions use trade credit to lend, whereas those in high-tax jurisdictions use trade credit to borrow: 10% lower local tax rates are associated with net trade credit positions that are 1.4% higher as a fraction of sales. The use of trade credit to get capital out of low-tax, low-return environments is also illustrated by reactions of U.S. firms to the temporary repatriation tax holiday in 2005, when affiliates with positive net trade credit positions were significantly more likely than others to repatriate dividends to parent companies in the United States.
Keywords: Trade;
Capital;
Taxation;
Resource Allocation;
Credit;
Multinational Firms and Management;
United States;
Citation: Desai, Mihir, C. Fritz Foley, and James R. Hines Jr. " Trade Credit and Taxes." NBER Working Paper Series, No. 18107, May 2012.
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Working Paper
| 2011
Poultry in Motion: A Study of International Trade Finance Practices
Pol Antras and C. Fritz Foley
This paper analyzes the financing terms that support international trade and sheds light on how and why these arrangements affect trade. Using detailed transaction-level data from a U.S.-based exporter of frozen and refrigerated food products, primarily poultry, it begins by describing broad patterns about the use of alternative financing terms. These patterns help discipline a model in which the trade finance mode is shaped by the risk that an importer defaults on an exporter and by the possibility that an exporter does not deliver goods as specified in the contract. The empirical results indicate that transactions are more likely to occur on cash in advance or letter of credit terms when the importer is located in a country with weak contractual enforcement and in a country that is farther from the exporter. Letters of credit, however, are rarely used by the exporter. As an importer develops a relationship with the exporter, transactions are less likely to occur on terms that require prepayment. During the recent crisis, the exporter was more likely to demand cash in advance terms when transacting with new customers, and customers that traded on cash in advance terms prior to the crisis disproportionately reduced their purchases. These results can be rationalized by the model whenever 1) misbehavior on the part of the exporter is of little concern to importers and 2) local banks in importing countries are typically more effective than the exporter in pursuing financial claims against importers.
Keywords: Financial Crisis;
Trade;
Capital;
Cost;
Financing and Loans;
Partners and Partnerships;
Mathematical Methods;
Food and Beverage Industry;
United States;
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Working Paper
| 2010
Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment
Robert C. Feenstra, Robert E. Lipsey, Lee G. Branstetter, C. Fritz Foley, James Harrigan, J. Bradford Jensen, Lori Kletzer, Catherine Mann, Peter K. Schott and Greg C. Wright
This report, prepared for the Committee on Economic Statistics of the American Economic Association, examines the state of available data for the study of international trade and foreign direct investment. Data on values of imports and exports of goods are of high quality and coverage, but price data suffer from insufficient detail. It would be desirable to have more data measuring value-added in trade as well as prices of comparable domestic and imported inputs. Value data for imports and exports of services are too aggregated and valuations are questionable, while price data for service exports and imports are almost non-existent. Foreign direct investment data are of high quality, but quality has suffered from budget cuts. Data on trade in intellectual property are fragmentary. The intangibility of the trade makes measurement difficult, but budget cuts have added to the difficulties. Modest funding increases would result in data more useful for research and policy analysis.
Keywords: Trade;
Foreign Direct Investment;
Price;
Globalization;
Policy;
Information;
Intellectual Property;
Citation: Feenstra, Robert C., Robert E. Lipsey, Lee G. Branstetter, C. Fritz Foley, James Harrigan, J. Bradford Jensen, Lori Kletzer, Catherine Mann, Peter K. Schott, and Greg C. Wright. " Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment." NBER Working Paper Series, No. 16254, August 2010.
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Case
| HBS Case Collection
|
2013
(Revised from original 2012 version)
Doing Business in Malaysia
C. Fritz Foley, Michael Shih-Ta Chen and Keith Chi-Ho Wong
This case focuses on the current business environment in Malaysia as of 2012 by introducing the main economic, political and cultural aspects of the country for those interested in doing business there. The advantages and challenges of investing and doing business in Malaysia are also noted by HBS alumni who have experience in the country. Finally, the case deals with the subject of talent recruitment and staff management, a top issue in developing economies. Stuart Dean (MBA 1979, a current Director of the HBS Asia-Pacific Advisory Board who lives in Malaysia and CEO of General Electric ASEAN), who oversees GE's businesses across Southeast Asia, had to decide in 2012 whether he should appoint another expat for the position of Managing Director of GE Engine Services Malaysia (a division of GE Aviation), which is one of the leading aircraft maintenance, repair and overhaul facilities in the region, or to promote a local from within, for the first time in the company's history. Making the choice entailed criteria such as historical and culture sensitivities, and an ability to understand complex technology and socio-political and regulatory environments.
Keywords: emerging market finance;
emergent countries;
strategy;
business history;
Economic History;
fieldwork;
Emerging Markets;
Business Ventures;
Strategy;
Malaysia;
Citation: Foley, C. Fritz, Michael Shih-Ta Chen, and Keith Chi-Ho Wong. "Doing Business in Malaysia." Harvard Business School Case 713-431, January 2013. (Revised from original September 2012 version.)
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Background Note
| HBS Case Collection
|
2013
(Revised from original 2012 version)
Inventory-Based Lending Industry Note
C. Fritz Foley, Ananth Raman and Nathan C. Craig
Keywords: Banks and Banking;
Financing and Loans;
Banking Industry;
Citation: Foley, C. Fritz, Ananth Raman, and Nathan C. Craig. "Inventory-Based Lending Industry Note." Harvard Business School Background Note 612-057, January 2013. (Revised from original January 2012 version.)
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Module Note
|
2011
Financing International Trade
C. Fritz Foley
This module note summarizes the key insights covered in the Financing International Trade module of the International Financial Management course. It also provides a framework that guides decisions about which financing terms should be used in which situations.
Keywords: Trade;
International Finance;
Decisions;
Situation or Environment;
Framework;
Globalization;
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Teaching Note
| HBS Case Collection
|
2010
The Export-Import Bank of the United States (TN)
C. Fritz Foley and Matthew Johnson
Teaching Note for 211032.
Keywords: Groups and Teams;
Financing and Loans;
Sales;
Problems and Challenges;
Credit;
Markets;
Innovation and Invention;
Organizational Structure;
Value;
Banking Industry;
Financial Services Industry;
United States;
United Arab Emirates;
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Case
| HBS Case Collection
|
2010
(Revised from original 2010 version)
Belco Global Foods
C. Fritz Foley and Matthew Johnson
This case introduces students to the fundamental issues that managers face when deciding what international trade finance terms to use when transacting with other firms. In late 2009, Pam Arnold, the head of global credit at Belco Global Foods, must decide which trade finance terms to offer to two new customers and how to pursue a claim against a customer who has missed a payment deadline.
Keywords: Trade;
Credit;
Financing and Loans;
International Finance;
Globalized Firms and Management;
Food and Beverage Industry;
Citation: Foley, C. Fritz, and Matthew Johnson. " Belco Global Foods." Harvard Business School Case 211-033, November 2010. (Revised from original October 2010 version.)
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Case
| HBS Case Collection
|
2010
(Revised from original 2010 version)
The Export-Import Bank of the United States
C. Fritz Foley and Matthew Johnson
In the fall of 2009, Fred Hochberg, chairman of the Export-Import Bank of the United States (Ex-Im), and his team struggled to find a way to help finance the sale of Boeing aircraft to Emirates. Ex-Im responds to the challenges in the credit market with an innovative offering. This case provides students with an opportunity to analyze the structure and activities of an export credit agency and to value the expected costs of issuing a loan guarantee.
Keywords: Trade;
Credit;
Financing and Loans;
International Finance;
Banking Industry;
United States;
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Teaching Note
| HBS Case Collection
|
2010
Belco Global Foods (TN)
C. Fritz Foley and Matthew Johnson
Teaching Note for 211033.
Keywords: Managerial Roles;
Leadership Style;
Trade;
International Finance;
Globalization;
Decisions;
Customers;
Food and Beverage Industry;
Citation: Foley, C. Fritz, and Matthew Johnson. " Belco Global Foods (TN)." Harvard Business School Teaching Note 211-042, November 2010.
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Case
| HBS Case Collection
|
2010
(Revised from original 2008 version)
NEC Electronics
C. Fritz Foley, Robin Greenwood and James Quinn
Why do shares in NEC Electronics, a publicly listed subsidiary of Japan conglomerate NEC, trade at a discount to their fundamental value? Can Perry Capital, a U.S. hedge fund, restructure this subsidiary and generate significant returns? This case provides students with an opportunity to analyze Perry's decision to invest in NEC Electronics. In doing so, it asks for the reasons that NEC might take actions that destroy value and shift value away from NECE's minority shareholders. The events covered allow for a discussion of how ownership concentration constrains restructuring alternatives, how hedge fund investors might confront controlling shareholders, and how the mispricing of agency costs can give rise to ownership structures that allow for minority shareholder expropriation.
Keywords: Restructuring;
Private Equity;
Investment Return;
Ownership Stake;
Business and Shareholder Relations;
Financial Services Industry;
Japan;
Citation: Foley, C. Fritz, Robin Greenwood, and James Quinn. " NEC Electronics." Harvard Business School Case 209-001, November 2010. (Revised from original October 2008 version.)
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Teaching Note
| HBS Case Collection
|
2010
(Revised from original 2009 version)
NEC Electronics (TN)
C. Fritz Foley and Robin Greenwood
Teaching Note for [209001].
Keywords: Information Technology Industry;
Citation: Foley, C. Fritz, and Robin Greenwood. " NEC Electronics (TN)." Harvard Business School Teaching Note 209-028, November 2010. (Revised from original March 2009 version.)
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Supplement
| HBS Case Collection
|
2010
The Export-Import Bank of the United States (CW)
C. Fritz Foley and Matthew Johnson
In the fall of 2009, Fred Hochberg, Chairman of The Export-Import Bank of the United States (Ex-Im), and his team struggled to find a way to help finance the sale of Boeing aircraft to Emirates. Ex-Im responds to the challenges in credit market with an innovative offering. This case provides students with an opportunity to analyze the structure and activities of an export credit agency and to value the expected costs of issuing a loan guarantee.
Keywords: Trade;
Cost Management;
Credit;
Financing and Loans;
Innovation and Invention;
Markets;
Problems and Challenges;
Sales;
Banking Industry;
United Arab Emirates;
United States;
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Supplement
| HBS Case Collection
|
2010
Belco Global Foods: Spreadsheet Supplement (CW)
C. Fritz Foley and Matthew Johnson
This case introduces students to the fundamental issues that managers face when deciding what international trade finance terms to use when transacting with other firms. In late 2009, Pam Arnold, the Head of Global Credit at Belco Global Foods must decide which trade finance terms to offer to two new customers and how to pursue a claim against a customer who has missed a payment deadline.
Keywords: Customers;
Decisions;
Trade;
Financial Strategy;
Governance Compliance;
Managerial Roles;
Market Transactions;
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Background Note
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2010
(Revised from original 2010 version)
Note on International Trade Finance
C. Fritz Foley, Matthew Johnson and David Lane
This note provides an introduction to the financing terms and payment arrangements that support international trade. It describes the principal instruments of trade finance, the limited evidence on their relative use, and the international trade dispute resolution mechanisms that form the backdrop against which traders select financing terms.
Keywords: Trade;
Credit;
Financial Instruments;
Financing and Loans;
International Finance;
Conflict and Resolution;
Citation: Foley, C. Fritz, Matthew Johnson, and David Lane. " Note on International Trade Finance." Harvard Business School Background Note 211-007, October 2010. (Revised from original September 2010 version.)
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Teaching Note
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2010
Chrysler's Sale to Fiat (TN)
C. Fritz Foley and Lena G. Goldberg
Teaching Note for 210022.
Keywords: Mergers and Acquisitions;
Restructuring;
Financial Crisis;
Assets;
Policy;
Cost vs Benefits;
Sales;
Government and Politics;
Auto Industry;
United States;
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Case
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2009
(Revised from original 2009 version)
WL Ross and Plascar
C. Fritz Foley and Linnea Meyer
How can distressed investors take advantage of the procedures governing an international bankruptcy? Wilbur L. Ross, chairman and CEO of the private equity firm WL Ross & Co., LLC, has the opportunity to bid for debt and equity claims on Plascar Industria e Comercio Ltda., the Brazilian subsidiary of the bankrupt global auto components company Collins & Aikman Corp. In evaluating this opportunity, students must analyze Ross's strategy to reshape a global industry with significant overcapacity, consider the opportunities created by the legal procedures that govern cross-border insolvencies, study a debt overhang problem, and consider how restructuring alternatives can address this problem.
Keywords: Borrowing and Debt;
Private Equity;
Insolvency and Bankruptcy;
Investment;
Cross-Cultural and Cross-Border Issues;
Globalized Firms and Management;
Globalized Markets and Industries;
Citation: Foley, C. Fritz, and Linnea Meyer. " WL Ross and Plascar." Harvard Business School Case 209-091, November 2009. (Revised from original March 2009 version.)
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Teaching Note
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2009
(Revised from original 2009 version)
WL Ross and Plascar (TN)
C. Fritz Foley and Linnea Meyer
Teaching Note for [209091].
Citation: Foley, C. Fritz, and Linnea Meyer. " WL Ross and Plascar (TN)." Harvard Business School Teaching Note 209-092, November 2009. (Revised from original March 2009 version.)
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Teaching Note
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2009
(Revised from original 2009 version)
Noble Group (TN)
C. Fritz Foley and Matthew Johnson
Teaching Note for [210021].
Citation: Foley, C. Fritz, and Matthew Johnson. " Noble Group (TN)." Harvard Business School Teaching Note 210-030, October 2009. (Revised from original October 2009 version.)
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Case
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2009
Noble Group
C. Fritz Foley, Michael Shih-ta Chen, Matthew Johnson and Linnea Meyer
What role does trade finance play in facilitating global supply chain management? Richard S. Elman, founder and CEO of Noble Group Ltd., a global commodities trading company based in Hong Kong, must raise capital to support the firm's working capital and investment needs. In evaluating by which means Elman should raise capital, students must consider issues relating to the payment terms and financing arrangements used in world trade, as well as the risk management and operating decisions of a trade intermediary.
Keywords: Trade;
Capital;
Financing and Loans;
International Finance;
Globalized Firms and Management;
Risk Management;
Supply Chain Management;
Hong Kong;
Citation: Foley, C. Fritz, Michael Shih-ta Chen, Matthew Johnson, and Linnea Meyer. " Noble Group." Harvard Business School Case 210-021, October 2009.
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Supplement
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2009
Noble Group (CW)
C. Fritz Foley and Matthew Johnson
What role does trade finance play in facilitating global supply chain management? Richard S. Elman, founder and CEO of Noble Group Ltd., a global commodities trading company based in Hong Kong, must raise capital to support the firm's working capital and investment needs. In evaluating by which means Elman should raise capital, students must consider issues relating to the payment terms and financing arrangements used in world trade, as well as the risk management and operating decisions of a trade intermediary.
Keywords: Risk Management;
Supply Chain Management;
Trade;
Global Strategy;
Investment;
Capital;
Hong Kong;
Citation: Foley, C. Fritz, and Matthew Johnson. " Noble Group (CW)." Harvard Business School Spreadsheet Supplement 210-702, October 2009.
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Case
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2009
Nomura's Global Growth: Picking Up Pieces of Lehman
C. Fritz Foley and Linnea Meyer
What issues commonly arise in international financial management? Kenichi Watanabe and Takumi Shibata, CEO and COO of Nomura Holdings Inc., one of the leading investment banks in Asia, have the opportunity to expand their firm internationally through the acquisition of various parts of Lehman Brothers, an insolvent global investment bank. In evaluating this opportunity, students must consider the complexities of such expansion, including the challenges posed by a multinational insolvency, the difficulties of post-merger integration in a cross-border acquisition, and more general issues related to currency hedging and international taxation.
Keywords: Mergers and Acquisitions;
Insolvency and Bankruptcy;
Investment Banking;
International Finance;
Cross-Cultural and Cross-Border Issues;
Expansion;
Financial Services Industry;
Japan;
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Case
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2009
(Revised from original 2008 version)
Finansbank 2006
C. Fritz Foley and Linnea Meyer
How do financial policy requirements and benefits of ownership concentration affect the need for and process of corporate restructuring? This case provides students with an opportunity to analyze the restructuring of a Turkish multinational business group by way of a merger. Finansbank AŞ is a bank headquartered in Turkey with additional operations in Holland, Switzerland, Russia, Romania, and Ukraine. It was founded by Hüsnü Özyeğin in 1987 and in April 2006, the National Bank of Greece (NBG) offered to buy part of the bank. Students can consider which factors contributed to Finansbank's growth and success. In order to then assess the terms of NBG's offer, they can evaluate given valuations of the bank and analyze why the proposed deal is structured so the Özyeğin retains a stake and buys back the non-Turkish operations. Students can also consider the offer from the perspective of minority shareholders.
Keywords: Leveraged Buyouts;
Mergers and Acquisitions;
Restructuring;
Capital Budgeting;
Agreements and Arrangements;
Valuation;
Turkey;
Greece;
Citation: Foley, C. Fritz, and Linnea Meyer. " Finansbank 2006." Harvard Business School Case 208-108, June 2009. (Revised from original May 2008 version.)
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Teaching Note
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2009
(Revised from original 2006 version)
Restructuring Navigator Gar Plc (TN)
C. Fritz Foley
Keywords: Restructuring;
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Teaching Note
| HBS Case Collection
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2009
(Revised from original 2008 version)
Finansbank 2006 (TN)
C. Fritz Foley and Linnea Meyer
Teaching Note for [208-108].
Keywords: Investment;
Finance;
Financial Services Industry;
Citation: Foley, C. Fritz, and Linnea Meyer. " Finansbank 2006 (TN)." Harvard Business School Teaching Note 208-149, April 2009. (Revised from original May 2008 version.)
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Supplement
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2009
WL Ross and Plascar (CW)
C. Fritz Foley and Linnea Meyer
Citation: Foley, C. Fritz, and Linnea Meyer. " WL Ross and Plascar (CW)." Harvard Business School Spreadsheet Supplement 209-723, March 2009.
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Supplement
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2008
NEC Electronics (CW)
C. Fritz Foley, Robin Greenwood and James Quinn
Why do shares in NEC Electronics, a publicly listed subsidiary of Japan conglomerate NEC trade at a discount to their fundamental value? Can Perry Capital, a U.S. hedge fund, restructure this subsidiary and generate significant returns? This case provides students with an opportunity to analyze Perry's decision to invest in NEC Electronics. In doing so, it asks for the reasons that NEC might take actions that destroy value and shift value away from NECE's minority shareholders. The events covered allow for a discussion of how ownership concentration constrains restructuring alternatives, how hedge fund investors might confront controlling shareholders, and how the mis-pricing of agency costs can give rise to ownership structures that allow for minority shareholder expropriation.
Keywords: Business Conglomerates;
Business Subsidiaries;
Restructuring;
Decisions;
Investment Return;
Investment Funds;
Price;
Ownership;
Agency Theory;
Business and Shareholder Relations;
Value Creation;
Electronics Industry;
Japan;
United States;
Citation: Foley, C. Fritz, Robin Greenwood, and James Quinn. " NEC Electronics (CW)." Harvard Business School Spreadsheet Supplement 209-711, November 2008.
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Supplement
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2008
Finansbank 2006 (CW)
C. Fritz Foley and Linnea Meyer
How do financial policy requirements and benefits of ownership concentration affect the need for and process of corporate restructuring? This case provides students with an opportunity to analyze the restructuring of a Turkish multinational business group by way of a merger. Finansbank A? is a bank headquartered in Turkey with additional operations in Holland, Switzerland, Russia, Romania, and Ukraine. It was founded by Hüsnü Özye?in in 1987, and in April 2006, the National Bank of Greece (NBG) offered to buy part of the bank. Students can consider which factors contributed to Finansbank's growth and success. In order to then assess the terms of NBG's offer, they can evaluate given valuations of the bank and analyze why the proposed deal is structured so that Özye?in retains a stake and buys back the non-Turkish operations. Students can also consider the offer from the perspective of minority shareholders.
Keywords: Mergers and Acquisitions;
Restructuring;
Financing and Loans;
Policy;
Compensation and Benefits;
Growth and Development Strategy;
Ownership;
Business and Shareholder Relations;
Banking Industry;
Russia;
Turkey;
Romania;
Switzerland;
Ukraine;
Citation: Foley, C. Fritz, and Linnea Meyer. " Finansbank 2006 (CW)." Harvard Business School Spreadsheet Supplement 208-724, May 2008.
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Supplement
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2007
Restructuring Navigator Gas Transport Plc. (CW)
C. Fritz Foley
Keywords: Restructuring;
Transportation Industry;
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Case
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2007
(Revised from original 2006 version)
Restructuring Navigator Gas Transport Plc
C. Fritz Foley
How should creditors pursue their claims in a multi-jurisdiction bankruptcy? David Butters, Managing Director at Lehman Brothers, negotiates a restructuring of Navigator Gas Transport, a shipping company that is headquartered in Switzerland, incorporated in the Isle of Man, and operates ships that travel around the world. In analyzing the choices he faces, students must consider how the initial capitalization of Navigator contributed to its financial distress, evaluate several restructuring plans from a variety of perspectives, and assess how Butters might resolve the legal inconsistencies that arise in a multi-jurisdiction bankruptcy. In addition, they must determine if Butters has sufficient information about, and control over, operations at Navigator to be confident engaging in a lengthy set of legal proceedings.
Keywords: Management Teams;
Insolvency and Bankruptcy;
Complexity;
Capital Structure;
Restructuring;
International Finance;
Law;
Ship Transportation;
Shipping Industry;
Switzerland;
Isle of Man;
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Case
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2001
(Revised from original 2000 version)
Alphatec Electronics Pcl
Stuart C. Gilson, C. Fritz Foley and Perry Fagan
The newly appointed CEO of an important high-technology company in Thailand must lead the company through a complicated debt restructuring. Due to the collapse of the Thai currency, the company's debt burden, like that of most Thai companies, has skyrocketed because it has borrowed heavily in U.S. dollars. The CEO, who is a U.S. citizen, must restructure the company under the recently revised, and largely untested, new Thai bankruptcy law. The new law allows troubled companies to reorganize their businesses following an approach that is similar, but not identical, to that practiced in the United States under Chapter 11 of the Bankruptcy Code.
Citation: Gilson, Stuart C., C. Fritz Foley, and Perry Fagan. " Alphatec Electronics Pcl." Harvard Business School Case 200-004, March 2001. (Revised from original February 2000 version.)
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Case
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1998
Cooperating to Compete: EGS of Turkey
Pankaj Ghemawat and C. Fritz Foley
In the early 1980s, Turkey adopted policies that liberalized trade as a part of a structural adjustment program. Within the garment industry, small- and medium-scale enterprises were not well positioned to take advantage of the new opportunities to compete in international markets. In order to overcome challenges in marketing, obtaining financing, and negotiating with government trade officials, competitors came together to form Ege Giyim Sanayi ve Dis Ticaret A.S. (EGS). EGS's rapid expansion forced it to face crucial questions about both its governance structure and future diversification opportunities.
Keywords: Trade;
Corporate Governance;
Policy;
Partners and Partnerships;
Competitive Strategy;
Diversification;
Turkey;
Awards & Honors
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C. Fritz Foley: Won with Mihir A. Desai the 2008 Pearson/Prentice Hall Prize for Best Paper in Financial Management for their paper (with James R. Hines Jr.) "Dividend Policy inside the Multinational Firm" (2007).
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C. Fritz Foley: Runner up for the 2009 Review of Financial Studies-Michael Brennan Best Paper Prize for his paper with Mihir Desai and Kristen Forbes, "Financial Constraints and Growth: Multinational and Local Firm Responses to Currency Crises" (November 2008).
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