Title: Multinational diversification and performance: a re-evaluation of the evidence

Authors: Philip H. Siegel; Carl Borgia; Jeff Lessard; Khondkar Karim

Addresses: McCurry & Company CPAs, 21301 Powerline Road, Boca Raton, FL 33433, USA ' Florida Atlantic University, School of Accounting, Glades Road, Boca Raton 33401, USA ' University of Massachusetts Lowell, Robert J. Manning School of Business, One University of Lowell, Lowell, MA 01854, USA ' University of Massachusetts Lowell, Robert J. Manning School of Business, One University of Lowell, Lowell, MA 01854, USA

Abstract: Expanding upon prior studies, firms with foreign operations are segmented by three different schemes: the percentage of foreign tax liability to total tax liability; the percentage of foreign sales to total sales; the percentage of foreign assets to total assets. We evaluate whether the degree of foreign participation affects the risk-return profile of the firms by categorising firms with foreign participation into quintiles. The research indicates significant differences exist between domestic firms and multinational firms. The study suggests that the extent of multinational diversification does not provide incremental economic benefit. The advantages enjoyed by multinational corporations appear to have disappeared over time owing to an increasing integration of the global economy.

Keywords: multinational corporations; MNC; capital market analysis; international risk and return.

DOI: 10.1504/IJAF.2017.085488

International Journal of Accounting and Finance, 2017 Vol.7 No.2, pp.95 - 109

Available online: 13 Jul 2017 *

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