Department of Economics and Business Economics

Multinationality as real option facilitator – Illusion or reality?

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaperJournal articleResearchpeer-review

  • Tom Aabo
  • Christos Pantzalis, University of South Florida, United States
  • Jung Chul Park, University of South Florida, United States
Previous literature provides multiple conflicting arguments on why and when multinationality should enhance or impede the value-relevance of firms’ real options. We address this issue by examining whether the relationship between stock returns and changes in return volatility varies with multinationality. Our results indicate that multinationality does indeed act as a real option facilitator. Furthermore, we show that, consistent with the notion that there are limits to the operating flexibility associated with multinationality this benefit only accrues fully if the firm is not financially constrained and stabilizes at very high degrees of multinationality.
Original languageEnglish
JournalJournal of Corporate Finance
Pages (from-to)1-17
Number of pages17
Publication statusPublished - 2016

See relations at Aarhus University Citationformats

ID: 98875446