The impact of internationalization and capital investment on firm performance: Evidence from the manufacturing sector in the ASEAN-5 countries, 2012-2016

Ivan Devara, Rahmat Aryo Baskoro

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

This study aims to analyze whether firms that have a high internationalization rate and make significant investments will achieve good firm performance as measured by the return on assets. Internationalization is measured by foreign sales to total sales, and capital investment is measured by capital expenditure to total assets. I collected a sample of 50 manufacturing firms with the largest market capitalization of each country in the ASEAN-5 within the period 2012-2016. The panel data regression method was used. The results revealed that internationalization has a negative relationship to firm performance that could be caused by the ASEAN-5 still being in the early stages of internationalization. However, capital investment has a positive relationship with firm performance, which is supported by the capital budgeting theory.

Original languageEnglish
Title of host publicationBusiness and Management Issues in the Global and Digital Era
Subtitle of host publicationIndonesian Perspectives
PublisherNova Science Publishers, Inc.
Pages17-32
Number of pages16
ISBN (Electronic)9781536165302
ISBN (Print)9781536162752
Publication statusPublished - 11 Nov 2019

Keywords

  • ASEAN-5
  • Capital investment
  • Export
  • Firm performance

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