1Department of Banking and Finance National, Chi-Nan University, Taiwan Takming College, Taiwan
2Institute of Business and Management, National Chiao Tung University, Taiwan Institute of Business and Management, National Chiao Tung University, 118, Chung-Hsiao W. Rd., Sec. 1, Taipei City 100, Taiwan.
3Department of Banking and Finance, National Chi-Nan University, Taiwan
*E-mail: jinlihu@yahoo.com
This research constructs a framework to measure a multinational enterprise's financial flexibility containing three dimensions: (1) operational ability, (2) financing ability, and (3) liquidity ability. We then build a panel dataset of 100 information technology firms and 167 non-information technology firms in Taiwan during 1999–2003. Our major findings are as follows: (1) Export ratio, debts from foreign countries, spontaneous short-term debt ratio, and quick ratio have significantly positive effects on operational performance. (2) Foreign assets ratio has a significantly negative effect on operational performance. (3) Equity from foreign countries, mainland China investment, and external short-term debt ratio have no significant effects on operational performance.
financing ability, liquidity ability, operational ability
