Empirical Research on Cross-national Distances and Firm Risks in Multinationals

2021 Fiscal Year Final Research Report

• Project/Area Number: 19K13847
• Research Category: Grant-in-Aid for Early-Career Scientists
• Allocation Type: Multi-year Fund
• Review Section: Basic Section 07100:Accounting-related
• Research Institution: University of Tsukuba
• Principal Investigator: Gu Junjian 筑波大学, ビジネスサイエンス系, 助教 (10820433)
• Project Period (FY): 2019-04-01 – 2022-03-31
• Keywords: Firm risks / Cross-national Distances / Multinationals / Tax avoidance / Audit fees / FDI / Overseas expansion

Outline of Final Research Achievements

Motivated by international business and accounting literature on the effects of FDI activities, this project aims to comprehensively investigate the relation between FDI host countries’ differences and firm risks in terms of audit fees, accounting quality, and tax avoidance based on the setting from Japanese multinationals.
The main findings are as follows: (1) we find that a firm with an FDI host country portfolio with more countries with high investor protection or ethical standards is less likely to engage in tax avoidance; (2) we find that firms investing in more common-law/developing/remote countries exhibit relatively higher audit fees; and (3) internationalization is negatively related to the disclosure quality of analyst forecasts on management forecasts. The findings are consistent with the notion that firm risks are associated with the characteristics of host countries and the degree of internationalization. The findings are published in several international journals.

Free Research Field

会計

Academic Significance and Societal Importance of the Research Achievements

日本金融庁は企業の海外戦略を重要視して、海外進出活動に支援しやすい環境を整備している。海外進出行動の中には高い企業リスク要因が潜み、失敗につながっていく。そして、海外進出行動に関するリスク要因（例えば、国際的差異や複雑性など）を無視すると、ネガティブな結果が生じる可能性が高まる。ゆえに、「海外進出」は社会として必要不可欠な研究キーワードだと思われる。本研究の研究方法と実証結果が、経営者のみならず、社外の利害関係者（例えば、投資者や、税務署、会計基準設定主体、監査人、研究者など）にも示唆を与えることが期待されている。