Multinationality and opaqueness

Tom Aabo, Christos Pantzalis and Jung Chul Park

Journal of Corporate Finance, 2015, vol. 30, issue C, 65-84

Abstract: We investigate whether and how multinationality affects the opaqueness of the firm. We use multiple alternative measurements of multinationality and opaqueness. Spanning nearly three decades for a large sample of US non-financial firms, we find a statistically and economically significant, positive relationship between multinationality and opaqueness. We find that this positive relationship hinges on whether or not the degree of foreign involvement is compatible with the structure of the firm's foreign operations network. Our results imply that multinationality's impact on opaqueness is alleviated when there is harmony between the size of foreign involvement and the extent of the MNC network's geographic dispersion. Previous literature has implicitly assumed a simple, positive relationship. This is the first study to explicitly address the question in a comprehensive manner.

Keywords: Multiple regression analysis; Internationalization theory; Stock market valuation; Stock prices; Multinationality; Opaqueness (search for similar items in EconPapers)
JEL-codes: F23 G14 G30 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:30:y:2015:i:c:p:65-84

DOI: 10.1016/j.jcorpfin.2014.12.002

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