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Both Sides of Corporate Diversification: The Value Impacts of Geographic and Industrial Diversification

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  • Bodnar, G.M.
  • Tang, C.
  • Weintrop, J.

Abstract

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 comparable domestic single-activity firm, while the average value of a firm with activities in multiple industrial segments is 5.4% lower than a protfolio of comparable domestic single-activity firms.

Suggested Citation

  • Bodnar, G.M. & Tang, C. & Weintrop, J., 1998. "Both Sides of Corporate Diversification: The Value Impacts of Geographic and Industrial Diversification," Weiss Center Working Papers 98-02, Wharton School - Weiss Center for International Financial Research.
    • Handle: RePEc:fth:pennif:98-02
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    More about this item

    Keywords

    GEOGRAPHY ; INDUSTRY ; CORPORATIONS;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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