Systematic Risk of the Multinational Corporation
Previous literature suggests that multinational firms decrease their systematic risk owing to the diversification benefit of having cash flows in different countries. It is posited in this article that multinational firms may increase their systematic risk owing to an increase in the standard deviation of cash flows from internationalization, with offsets the lower correlation associated with diversification. Evidence of a significant positive relationship between the level of systematic risk in a firm and the degree of that firm's internationalization is presented. This analysis is consistent with observed practitioner usage of higher discount rates in evaluating international projects.© 1998 JIBS. Journal of International Business Studies (1998) 29, 263–279
Year of publication: |
1998
|
---|---|
Authors: | Reeb, David M ; Kwok, Chuck C Y ; Baek, H Young |
Published in: |
Journal of International Business Studies. - Palgrave Macmillan, ISSN 0047-2506. - Vol. 29.1998, 2, p. 263-279
|
Publisher: |
Palgrave Macmillan |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Mainbanks and Investment Efficiency in Financial Distress
Reeb, David M, (2000)
-
Internationalization and Firm Risk: An Upstream-Downstream Hypothesis
Kwok, Chuck C Y, (2000)
-
Ranking the International Business Journals: A Reply
DuBois, Frank L, (2001)
- More ...