We model the vulnerability of an economy to a financial crisis as arising from the interaction of the degree of economic specialization and the intermediated financing of the investment opportunities. The probability of a financial crisis is shown to increase in the degree of economic...

This paper examines the effect of global diversification on firm value using a dataset of U.S. firms from 1994-2002. We document that global diversification enhances firm value. Specifically, we find Tobin's q, our proxy for firm value increases with foreign sales (measured as a fraction of the...

We model the vulnerability of an economy to a financial crisis as arising from the interaction of the degree of economic specialization and bank debt financing. The probability of a financial crisis is shown to increase in the degree of economic specialization. Bank debt financing has the...