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...

Corporate international diversification theory posits that multinational corporations (MNCs) should have lower risk and higher financial leverage than purely domestic corporations (DCs). We suggest an alternative upstream-downstream hypothesis according to which the overall effect of...

The literature provides conflicting evidence on the relation between corporate international activity and the cost and level of debt financing. Based on this evidence, we explore the impact of firm internationalization on debt financing. Using a market based sample of U.S. firms, we find...

Anecdotal accounts imply that founding families routinely engage in opportunistic activities that exploit minority shareholders. We gauge the severity of these moral hazard conflicts by examining whether founding families--as large, undiversified blockholders--seek to reduce firm-specific risk...

This paper examines how national culture, and collectivism in particular, influences corruption in bank lending. We hypothesize that interdependent self-construal and particularist norms in collectivist countries lead to a higher level of lending corruption through their influence both on the...

We summarize the major findings of the sixth global survey of business school internationalization sponsored by the Academy of International Business (AIB). The survey covers various aspects of internationalization including: objectives, organizational issues, curriculum and faculty...

Many financial managers think that foreign exchange hedging decisions are mainly a choice between to hedge or not to hedge. Nevertheless, previous researchers applied Ederington's portfolio approach and found that even for risk minimization, a complete hedge does not lead to the lowest risk....

Why does knowing the nationality of the company help predict its financial leverage? Differences in institutional backgrounds provide only a partial answer to this question. This study suggests that national culture affects corporate capital structures. Empirical hypotheses, drawn from financial...