| Summary: | 碩士 === 逢甲大學 === 國際貿易所 === 96 === This study examines the effects of the degree of internationalization and leverage with 226 firms from Taiwan. Using sample observations for multinational over the 2001–2006 period. Results for the sample show that the degree of internationalization is positively related to financial leverage in the beginning but there is no relation after threshold value. This result also shows that the relation between firm internationalization and debt financing is non-linear and one threshold exists.
For the sub-sample, the relation between the degree of internationalization and leverage is negative if firms only invest in developing countries. The degree of internationalization and leverage is positive if firms only invest in developed countries. These results consist with Upstream-Downstream hypothesis (Kwok & Reeb, 2000). When firms invest economically upstream, it decreases their risks and leads to an increase of debt usage. While downstream investing, it leads to greater firm risks and allows for less debt utilization.
The results of controlling variables including firm size (SIZE), agency cost (AC), volatility (VOL), profitability (PRO), liquidity (LIQ), and exchange rate risk (EXC) are consistent with the trade-off theory, the agency theory, the liquidity theory and the result of Reeb (2000).
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