Multinational diversification and performance: a re-evaluation of the evidence

Philip H. Siegel, Carl Borgia, Jeff Lessard and Khondkar Karim

International Journal of Accounting and Finance, 2017, vol. 7, issue 2, 95-109

Abstract: Expanding upon prior studies, firms with foreign operations are segmented by three different schemes: the percentage of foreign tax liability to total tax liability; the percentage of foreign sales to total sales; the percentage of foreign assets to total assets. We evaluate whether the degree of foreign participation affects the risk-return profile of the firms by categorising firms with foreign participation into quintiles. The research indicates significant differences exist between domestic firms and multinational firms. The study suggests that the extent of multinational diversification does not provide incremental economic benefit. The advantages enjoyed by multinational corporations appear to have disappeared over time owing to an increasing integration of the global economy.

Keywords: multinational corporations; MNC; capital market analysis; international risk and return. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ids:intjaf:v:7:y:2017:i:2:p:95-109

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