Does Multinationality Matter: Evidence of Value Destruction in U.S. MultinationalCorporations

摘要

We document that capital markets penalize corporate multinationality by putting alower value on the equity of multinational corporations than on otherwise similar domestic corporations. Using Tobins q, the multinational discount is estimated to be in the range of 8.6% to 17.1%. The most important mechanism of value destruction is an asset channel in which multinationals have disproportionately high levels of assets in relation to the earnings they generate. Foreign assets are particularly associated with value destruction. In contrast, exporting from