Abstract

http://ssrn.com/abstract=1933777
 
 

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The Multinational Advantage


Drew D. Creal


University of Chicago - Booth School of Business - Econometrics and Statistics

Leslie A. Robinson


Dartmouth College - Tuck School of Business

Jonathan L. Rogers


University of Chicago - Booth School of Business

Sarah L. C. Zechman


University of Chicago - Booth School of Business

February 1, 2013

Chicago Booth Research Paper No. 11-37
Fama-Miller Working Paper

Abstract:     
Using a proprietary dataset, we evaluate whether the degree of foreign operations affects firm value by comparing actual value to imputed value for U.S. multinational corporations (MNCs). We argue that using benchmark firms operating in the same country and industry as each MNC segment controls for differences in discount rates and expected growth rates across countries and industries. This allows us to isolate the value effects of organizing a set of otherwise independent activities within a multinational network. We find robust evidence that multinational networks trade at a premium relative to a benchmark portfolio of independent firms.

Number of Pages in PDF File: 45

Keywords: firm valuation, multinational corporations, diversification

JEL Classification: F23, G32, G34, M41

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Date posted: September 28, 2011 ; Last revised: April 10, 2013

Suggested Citation

Creal, Drew D. and Robinson, Leslie A. and Rogers, Jonathan L. and Zechman, Sarah L. C., The Multinational Advantage (February 1, 2013). Chicago Booth Research Paper No. 11-37; Fama-Miller Working Paper. Available at SSRN: http://ssrn.com/abstract=1933777 or http://dx.doi.org/10.2139/ssrn.1933777

Contact Information

Drew D. Creal
University of Chicago - Booth School of Business - Econometrics and Statistics ( email )
Chicago, IL 60637
United States
Leslie Robinson
Dartmouth College - Tuck School of Business ( email )
Hanover, NH 03755
United States
603-646-4018 (Phone)
Jonathan L. Rogers
University of Chicago - Booth School of Business ( email )
5807 S Woodlawn
Chicago, IL 60637-1561
United States
773-834-0161 (Phone)
Sarah L. C. Zechman (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
(773)702-7136 (Phone)
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