Corporate internationalization, subsidiary locations, and the cost of equity capital

• 成果类型: Article
• 署名作者: Mihov, Atanas; Naranjo, Andy
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Richmond; State University System of Florida; University of Florida
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-018-00207-3
• 发表日期: 2019
• 页码: 1544-1565
• 关键词: corporate internationalization; Cost of equity capital; financial constraints; subsidiary locations

摘要

This study examines the relationship between corporate internationalization and the cost of equity capital. We find that international diversification reduces the cost of equity. The diversification benefits are particularly strong during the 2008 financial crisis and for financially constrained firms. We also find that market-specific factors serve as important channels through which the corporate internationalization effects amplify or attenuate. Overall, our study provides support for theories that multinational companies perform valuable diversification functions to investors in a world with segmented and imperfect financial markets.