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International Diversification (international + diversification)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India,

BRITISH JOURNAL OF MANAGEMENT, Issue 2 2009
Ajai S. Gaur
We investigate the impact of business group affiliation on the relationship between international diversification and firm performance for emerging economy firms. We develop the theoretical arguments based on an integration of the literature on international diversification with the institutional theory perspective. We argue for a U-shaped relationship between international diversification and firm performance, and suggest that a firm's affiliation to a business group moderates the relationship between international diversification and firm performance. Based on a sample of Indian firms, we find that firm performance is positively related to the degree of internationalization, while business group affiliation reduces the positive effect of internationalization on firm performance. [source]

Does Correlation Between Stock Returns Really Increase During Turbulent Periods?

ECONOMIC NOTES, Issue 1 2001
Francois Chesnay
Correlations betwen international equity markets are often claimed to increase during periods of high volatility. Therefore the benefits of international diversification are reduced when they are most needed, i.e. during turbulent periods. This paper investigates the relationship between international correlation and stock-market turbulence. We estimate a multivariate Markov-switching model, in which the correlation matrix varies across regimes. Subsequently, we test the null hypothesis that correlations are regime-independent. Using weekly stock returns for the S&P, the DAX and the FTSE over the period 1988,99, we find that international correlations significantly increased during turbulent periods. (J.E.L.: C53, G15). [source]

Determinants of Investor Demand for Cross-Listed Firms

FINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 3 2010
George Athanassakos
G11; G12; G15 By focusing on the decisions of investors to invest in cross-listed stocks, this paper presents new evidence on why we observe striking differences in the percentage of trade in foreign markets for cross-listed stocks. With a large sample of Toronto Stock Exchange (TSX) stocks cross-listed in the U.S. and Canada, we document the effect of investor recognition and risk characteristics on the distribution of trading volume. Firms that are more visible to American investors are traded more heavily in the U.S. At the same time, firms that offer diverse risk characteristics are attractive to Americans. While investors understand the benefits of international diversification, as they are attracted to stocks that are different (e.g., the stock of small firms with few assets in the U.S.), they also seek stocks that provide them with high returns. [source]

International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India,

Survival during a Crisis: Alliances by Singapore Firms

BRITISH JOURNAL OF MANAGEMENT, Issue 3 2007
Nitin Pangarkar
In this study, we focus on the under-researched issue of how environmental shocks impact alliance survival. We draw from several different theoretical perspectives such as industrial organization economics, managerial theories of the firm (such as agency theory) and institutional theories. We argue that the relationship between the occurrence of environmental shock and alliance survival is a contingent one. Specifically, we hypothesize that the following types of alliances will exhibit better likelihood of survival: alliances that yield a balance of short-term and long-term benefits (scale alliances) rather than purely long-term benefits (link alliances); alliances that lead to either cost reduction or near-term improvement in revenue realization (marketing alliances); and alliances that bring together partners from different economic regions (those involving Western and Asian partners). Based on an analysis of 348 alliances formed by Singapore firms, we find that marketing alliances and those involving at least one Western partner indeed exhibit a better likelihood of survival during the Asian economic crisis. We conclude that alliances that can enhance revenue potential in the short-term are more robust to environmental shocks and that alliances can benefit from an effect similar to risk reduction through international diversification. [source]