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- Title
International Corporate Diversification and Financial Flexibility.
- Authors
Yeejin Jang
- Abstract
If the location of firm operations is relevant for financing, multinationals should have easier access to different foreign sources of funding relative to domestic firms. I document that U.S. multinationals are more likely to borrow from a foreign bank and to issue international bonds than are U.S. domestic firms. Multinationals are less affected than domestic firms by capital market dislocations because of greater funding flexibility. Using the 2007-2009 financial crisis as a capital supply shock, I find that multinationals relied more on foreign funding sources in bank loans and consequently reduced domestic investment less than did domestic firms.
- Subjects
PORTFOLIO diversification; INTERNATIONAL business enterprise financing; FOREIGN investments; BONDS (Finance); CAPITAL market
- Publication
Review of Financial Studies, 2017, Vol 30, Issue 12, p4133
- ISSN
0893-9454
- Publication type
Article
- DOI
10.1093/rfs/hhx065