Being Global Adds To Firm Value

Date Added: Nov 2009
Format: HTML

Firms such as Coca-Cola, P&G and Apple understand that being diversified globally adds value to their firm. Other types of firms such as conglomerates diversify industrially, across business lines, and globally, across countries. Interestingly, firm value increases more through global diversification than from being diversified across business lines, according to the author. Global diversification adds value to firms in several ways. On the financial dimension, firms get a boost in value from being diversified internationally. A multinational firm "completes the market" in a financial sense by allowing its shareholders indirect access to a foreign country.