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The Valuation of MNC International Operations during the 1990s

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  • Christophe, Stephen E
  • Pfeiffer, Ray J, Jr

Abstract

We investigate how international operations affected firm value during the early 1990s. We also investigate whether the disclosures of foreign operations in specific geographic regions under SFAS No. 14 provide investors with useful information beyond disclosure of aggregate foreign operations. We find that in the early 1990s, investors do not value international operations as highly as domestic operations, and that geographic region disclosures are not useful for conveying information about the specific location and magnitude of the firm's operations. This latter finding supports the recent FASB decision that eliminated the requirement that firms break out foreign operating statistics by geographic region. Copyright 2002 by Kluwer Academic Publishers

Suggested Citation

  • Christophe, Stephen E & Pfeiffer, Ray J, Jr, 2002. "The Valuation of MNC International Operations during the 1990s," Review of Quantitative Finance and Accounting, Springer, vol. 18(2), pages 119-138, March.
    • Handle: RePEc:kap:rqfnac:v:18:y:2002:i:2:p:119-38
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    Citations

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    Cited by:

    1. Joliet, Robert & Muller, Aline, 2016. "Are foreign earnings disclosures value-relevant?," Research in International Business and Finance, Elsevier, vol. 37(C), pages 170-183.
    2. Jason Sturgess, 2016. "Multinational Firms, Internal Capital Markets, and the Value of Global Diversification," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 6(02), pages 1-34, June.
    3. B. Elango & Yu‐Luen Ma & Nat Pope, 2008. "An Investigation Into the Diversification–Performance Relationship in the U.S. Property–Liability Insurance Industry," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(3), pages 567-591, September.
    4. Yong Yang & Nigel Driffield, 2012. "Multinationality-Performance Relationship," Management International Review, Springer, vol. 52(1), pages 23-47, February.
    5. Marcus Dittfeld, 2017. "Multinationality and Performance: A Context-Specific Analysis for German Firms," Management International Review, Springer, vol. 57(1), pages 1-35, February.
    6. Brett Olsen & B. Elango, 2005. "Do Multinational Operations Influence Firm Value? Evidence from the Triad Regions," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 4(1), pages 11-29, April.
    7. Gao, Wenlian & Chou, Julia, 2015. "Innovation efficiency, global diversification, and firm value," Journal of Corporate Finance, Elsevier, vol. 30(C), pages 278-298.
    8. Kaprielyan, Margarita, 2016. "Valuation consequences of the decision to divest in the globalized world," Journal of Multinational Financial Management, Elsevier, vol. 36(C), pages 16-29.
    9. Eckert, Stefan & Dittfeld, Marcus & Muche, Thomas & Rässler, Susanne, 2010. "Does multinationality lead to value enhancement? An empirical examination of publicly listed corporations from Germany," International Business Review, Elsevier, vol. 19(6), pages 562-574, December.
    10. Amine Tarazi & Iftekhar Hasan & Ibrahim Siraj & Qiang Wu, 2016. "Value Relevance of Earnings of Multinational Firms: Regulatory Regimes Associated with Foreign Subsidiaries," Working Papers hal-01360048, HAL.
    11. Lindner, Thomas & Klein, Florian & Schmidt, Stefan, 2018. "The effect of internationalization on firm capital structure: A meta-analysis and exploration of institutional contingencies," International Business Review, Elsevier, vol. 27(6), pages 1238-1249.
    12. Jory, Surendranath R. & Ngo, Thanh N., 2012. "The effect of foreign segment location on the geographical diversification discount," Global Finance Journal, Elsevier, vol. 23(2), pages 108-124.

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