 The value of multinationality and business group for Japanese firmsJongmoo Jay Choi, Takato Hiraki and James A. Landi Journal of Corporate Finance, 2014, vol. 29, issue C, 88-110 Abstract: We provide evidence for the combined value impacts of corporate multinationality and business group affiliation, incorporating the effect of endogeneity of diversification decisions. The results for Japanese industrial firms indicate that multinational firms have a statistically significant 2.3% value premium during FY1995–2011 relative to comparable domestic firms; however, the multinationality premium is moderated by the nature of business group as well as the characteristics of the host country. Specifically, the multinationality premium is negatively associated with both keiretsu membership and main bank ownership of group firms. Main bank ownership as well as vertical keiretsu affiliation positively impact the value of multinationality for firms operating in developing countries. These results hold even during the later part of the sample period, when the keiretsu and main bank systems have been under pressure. The implication is that corporate multinationality is a substitute for business group and for inadequate indigenous institutional infrastructure. Keywords: Multinationality; Corporate international diversification; Business group; Keiretsu; Japanese corporate finance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:29:y:2014:i:c:p:88-110 DOI: 10.1016/j.jcorpfin.2014.08.002 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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