Information-processing demands and the multinational enterprise: a comparison of foreign and domestic earnings estimates

We examine the information-processing demands top managers of the multinational enterprise (MNE) deal with in their portfolio of international operations by comparing the accuracy of foreign and domestic earnings estimates. Results indicate that the increase in information-processing demands is due to the complexity of managing foreign operations of the MNE. We also find greater information processing demands in foreign operations for managers of smaller multinational firms, firms with relatively low performance, and firms with lower levels of intangible assets. We use these results to develop implications for information-processing theory and practice.