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Are Multinational Corporations Superior Investment Vehicles for Achieving International Diversification?

Author

Listed:
  • Ike Mathur

    (Southern Illinois University)

  • Kyran Hanagan

    (Southern Illinois University)

Abstract

International portfolio diversification is advantageous to the investor from a risk reduction viewpoint. Investing in MNCs and direct investing in foreign firms are 2 methods of diversifying internationally. Two issues are examined in this paper: Are there barriers to direct international diversification by investors? Do MNCs enjoy certain unique economic and financial advantages? Positive responses to both of these questions indicate that MNCs are in fact superior investment vehicles for achieving international diversification.© 1983 JIBS. Journal of International Business Studies (1983) 14, 135–146

Suggested Citation

  • Ike Mathur & Kyran Hanagan, 1983. "Are Multinational Corporations Superior Investment Vehicles for Achieving International Diversification?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 14(3), pages 135-146, September.
    • Handle: RePEc:pal:jintbs:v:14:y:1983:i:3:p:135-146
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    Citations

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    Cited by:

    1. Patricia Chelley‐Steeley, 2008. "Concentration of the UK Stock Market," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(3‐4), pages 541-562, April.
    2. Desbordes, Rodolphe, 2007. "The sensitivity of U.S. multinational enterprises to political and macroeconomic uncertainty: A sectoral analysis," International Business Review, Elsevier, vol. 16(6), pages 732-750, December.
    3. Do, Hung X. & Nguyen, Nhut H. & Nguyen, Quan M.P., 2022. "Multinationals and stock return comovement," Global Finance Journal, Elsevier, vol. 52(C).
    4. Amit Pandey & Anil Kumar Sharma, 2023. "Effect of Index Concentration on Index Volatility and Performance," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 30(3), pages 559-585, September.
    5. Colm Kearney & Frank Barry, 2005. "MNEs and Industrial Structure in Host Countries:A Mean Variance Analysis of Ireland’s Manufacturing Sector," The Institute for International Integration Studies Discussion Paper Series iiisdp023, IIIS.
    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. Waheed, Amjad & Mathur, Ike, 1995. "Wealth effects of foreign expansion by U.S. banks," Journal of Banking & Finance, Elsevier, vol. 19(5), pages 823-842, August.
    8. Borde, Stephen F. & Whyte, Ann Marie & Wiant, Kenneth J. & Hoffman, Lorrie L., 1998. "New evidence on factors that influence the wealth effects of international joint ventures," Journal of Multinational Financial Management, Elsevier, vol. 8(1), pages 63-77, January.
    9. Jafarinejad, Mohammad & Ngo, Thanh & Escobari, Diego, 2018. "Disentangling the impacts of industrial and global diversification on firm risk," Global Finance Journal, Elsevier, vol. 37(C), pages 39-56.

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