The effect of multinationality measures upon the risk-return performance of US firms

Abstract

This study analyses the effect of a firm's overseas activities upon its risk-return performance for a sample of US firms (including multinational enterprises and domestic firms) by using different multinationality measures. The test results indicate that firms with a greater share of overseas activities have a greater opportunity to achieve a better risk-return performance than those with little foreign involvement. More importantly, for a firm which meets the basic requirement of multinationality (for MNEs as a whole), the number of foreign markets served has a minimal influence on its performance.