This paper examines the effect of both geographic and industrial diversification on firm value for a sample of over 20,000 firm-year observations of US corporations from 1987-1993. Our multivariate tests indicate the average value of a firm with international operations is 2.2% higher than a...

The structure of this paper is as follows. in section 1, I describe the welfare gain function. In section 2, I use stock returns for the G-7 countries to examine stock returns using standard mean- variance analysis. In section 3, I develop a single general equilibrium framework for examining...