Valuation effects of global diversification

Journal of International Business Studies

Volumn 40, Issue 9, 2009, Pages 1515-1532

  Gande, Amar ^a   Schenzler, Christoph ^b   Senbet, Lemma W ^c  

^a SOUTHERN METHODIST UNIVERSITY   (United States)

^b VANDERBILT UNIVERSITY   (United States)

^c UNIVERSITY OF MARYLAND   (United States)

Author keywords

Creditor rights; Cross border investments; Diversification strategies; Imperfect world capital markets theory; Internalization theory; Multinational corporations (MNCs) and enterprises (MNEs)

Indexed keywords

EID: 70649087186     PISSN: 00472506     EISSN: 14786990     Source Type: Journal    
DOI: 10.1057/jibs.2009.59     Document Type: Article

References (28)

1. Berger, P. G., & Ofek, E. 1995. Diversification's effect on firm value. Journal of Financial Economics, 37(1): 39-65.
2. Bodnar, G. M., Tang, C., & Weintrop, J. 1998. Both sides of corporate diversification: The value impacts of geographic and industrial diversification. Working Paper, University of Pennsylvania.
3. Campa, J. M., & Kedia, S. 2002. Explaining the diversification discount. Journal of Finance, 57(4): 1731-1762.
4. Caves, R. E. 1971. International corporations: The industrial economics of foreign investment. Economica, 38(149): 1-27.
5. Caves, R. E. 1982. Multinational enterprise and economic analysis. Cambridge: Cambridge University Press.
6. Delios, A., & Beamish, P. W. 1999. Geographic scope, product diversification and the corporate performance of Japanese firms. Strategic Management Journal, 20(8): 711-727.
7. Denis, D. J., Denis, D. K., & Yost, K. 2002. Global diversification, industrial diversification, and firm value. Journal of Finance, 57(5): 1951-1979.
8. Djankov, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. 2008. The law and economics of self-dealing. Journal of Financial Economics, 88(3): 430-465.
9. Dos Santos, M. B., Errunza, V. R., & Miller, D. P. 2008. Does corporate international diversification destroy value? Evidence from cross-border mergers and acquisitions. Journal of Banking and Finance, 32(12): 2716-2724.
10. Doukas, J. A., & Kan, O. B. 2006. Does global diversification destroy firm value? Journal of International Business Studies, 37(3): 352-371.
11. Doukas, J. A., & Lang, L. H. P. 2003. Foreign direct investment, diversification and firm performance. Journal of International Business Studies, 34(2): 153-172.
12. Errunza, V. R., & Senbet, L. W. 1981. The effects of international operations on the market value of the firm: Theory and evidence. Journal of Finance, 36(2): 401-417.
13. Errunza, V. R., & Senbet, L. W. 1984. International corporate diversification, market valuation, and size-adjusted evidence. Journal of Finance, 39(3): 727-743.
14. Fauver, L., Houston, J., & Naranjo, A. 2003. Capital market development, international integration, legal systems, and the value of corporate diversification: A cross-country analysis. Journal of Financial and Quantitative Analysis, 38(1): 135-157.
15. Fauver, L., Houston, J. F., & Naranjo, A. 2004. Cross-country evidence on the value of corporate industrial and international diversification. Journal of Corporate Finance, 10(5): 729-752.
16. Greene, W. H. 2008. Econometric analysis. Upper Saddle River, NJ: Prentice-Hall.
17. Huefner, R. J., Largay, J. A., & Hamlen, S. S. 2005. Advanced financial accounting. Mason, OH: Thomson Custom Publishing.
18. Jensen, M., & Meckling, W. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4): 305-360.
19. Jiraporn, P., Kim, Y. S., Davidson, W. N., & Singh, M. 2006. Corporate governance, shareholder rights and firm diversification: An empirical analysis. Journal of Banking and Finance, 30(3): 947-963.
20. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. 1997. Legal determinants of external finance. Journal of Finance, 52(3): 1131-1150.
21. Lang, L. H. P., & Stulz, R. M. 1994. Tobin's q, corporate diversification and firm performance. Journal of Political Economy, 102(6): 1248-1280.
22. Lins, K., & Servaes, H. 1999. International evidence on the value of corporate diversification. Journal of Finance, 54(6): 2215-2239.
23. Morck, R., & Yeung, B. 1991. Why investors value multinationality. Journal of Business, 64(2): 165-187.
24. Morck, R., & Yeung, B. 1992. Internalization: An event study test. Journal of International Economics, 33(1-2): 41-56.
25. Nam, J., Tang, C., Thornton, J. H., & Wynne, K. 2006. The effect of agency costs on the value of single-segment and multisegment firms. Journal of Corporate Finance, 12(4): 761-782.
26. Petersen, M. 2008. Estimating standard errors in finance panel data sets: Comparing approaches. Review of Financial Studies, 22(1): 435-480.
27. Spamann, H. 2008. "Law and finance" revisited. Harvard Law School Discussion Paper 12.
28. White, H. 1980. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48(4): 817-838.