 Financial sector diversification and MNC valuationChansog Francis Kim, Speros Margetis and Chris Pantzalis Journal of Multinational Financial Management, 2009, vol. 19, issue 5, pages 343-354 Abstract: We extend the literature on MNC performance by examining the relationship between market valuation of MNCs and intangibles associated with financial expertise. We identify firms as having financial expertise if they have diversified their business in the financial sector. We argue that financial expertise enhances the ability of MNCs to internalize financial transactions and take advantage of financing and investment opportunities around the world. Therefore, it is a potentially significant source of market power. Our test results demonstrate that as the degree of multinationality increases market valuation is positively related with financial expertise even after we account for several other control factors. Our findings imply that MNCs with financial expertise can be viewed as possessing an additional intangible, which essentially is the financial equivalent of the traditionally examined intangible assets, such as technological "know-how," goodwill, and managerial expertise. Keywords: International; finance; Multinational; firms; Diversification; Valuation; Intangibles (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:eee:mulfin:v:19:y:2009:i:5:p:343-354 Access Statistics for this article Journal of Multinational Financial Management is edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
Örebro University School of Business.