Multinational companies’ real asset ownership and its impact on diversification

Michael J. Seiler (Hawaii Pacific University, 1132 Bishop Street; Suite 504‐9, Honolulu, HI 96813. Tel: (808) 544 0827; Fax: (808) 544 0835; Email: mseiler@hpu.edu)

Journal of Corporate Real Estate

ISSN: 1463-001X

Publication date: 1 December 2005

Abstract

Purpose – This study examines whether or not holding a greater percentage of real assets significantly impacts the risk and risk‐adjusted return of U.S. based multinational companies. Design/methodology/approach – A series of rolling Two Stage Least Squares (2SLS) regression models are used to analyse the relationships among corporate real assets, systematic risk (beta), and risk‐adjusted return. Findings – The results of this study show that U.S. based multinational companies do have lower betas. However, U.S. based multinational companies’ cross border real asset holdings do not affect diversification and do not provide significantly higher risk‐adjusted returns to stockholders. Originality/value – This study builds upon the prior work of Seiler, Chatrath and Webb to consider multinational firms. This had never been done previously.

Keywords

Citation

Sun Hwang, E., Seiler, V. and Seiler, M. (2005), "Multinational companies’ real asset ownership and its impact on diversification", Journal of Corporate Real Estate, Vol. 7 No. 4, pp. 326-338. https://doi.org/10.1108/14630010510651070

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Publisher

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Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited

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