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Much Ado About Nothing? The Economic Impact of US Foreign Trade Mission Participation

Published online by Cambridge University Press:  20 January 2017

Karen E. Schnietz  and
Douglas A. Schuler
Karen E. Schnietz*
Affiliation:
Jones Graduate School of Management
Douglas A. Schuler
Affiliation:
Rice University
*
Jones Graduate School of Management, MS 531, Rice University, 6100 South Main Street, Houston, TX 77005–1892, USA. Tel: (713) 285–5388; Fax: (713) 285–5251; E-mail: [email protected]
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Abstract

The activist foreign trade missions of the Clinton Administration are intended to open strategically important, but often difficult-to-enter, emerging markets to US foreign investment with government-to-government negotiations. Some research streams suggest that participation in a trade mission should benefit firms, while others suggest that participation should have no discernible benefit. This paper performs several event studies to analyze the stock return of a portfolio of the publicly traded firms participating in trade missions from 1993 to 1996. It finds that participants did not experience positive or significant abnormal stock returns as a result of mission participation, regardless of how the event date is defined or the data segmented.

Type
Research Article
Information
Business and Politics , Volume 1 , Issue 2 , August 1999 , pp. 155 - 177
Copyright
Copyright © V.K. Aggarwal 1999 and published under exclusive license to Cambridge University Press 

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