Abstract:This paper proposes two main opposing channels through which firms' degree of internationalisation affects stock returns. In particular, firms that operate internationally benefit from risk reduction via diversification channel and also encounter higher risk exposure due to various risk factors in international markets. Using a sample of 566 multinational publicly listed companies in the London Stock Exchange during 1999 and 2010, this paper empirically tests whether firms' degree of internationalisation is a … Show more
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