The international control conundrum with exchange risk: An EVA framework

Laurent L. Jacque, Paul M. Vaaler

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


Principal-agent problems between corporate parent and subsidiary operations are frequently exacerbated in international settings by exchange rate fluctuations between the foreign subsidiary's local currency and the parent multinational corporation's reference currency. We develop a conceptual solution to this international control conundrum using Economic Value Added as the sole performance numéraire. Our framework facilitates assessment of foreign subsidiary performance in emerging-market countries in the presence of unexpected, exchange-related shocks.

Original languageEnglish (US)
Pages (from-to)813-832
Number of pages20
JournalJournal of International Business Studies
Issue number4
StatePublished - Dec 2001
Externally publishedYes


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