The purpose of this study is to examine empirically whether multinationality influences corporate value, and further to estimate how multinationality affects differently according to specific quantiles of corporate value. Using Ohlson s valuation model (1995) with ordinary least square regression, we demonstrate that multinationality is a key factor to corporate value after controlling confounding variables. We also find that the effect of multinationality varies across different quantiles, and its effect increase as a quintile increases in the test of a quantile regression. Compared to estimates of OLS, the estimate of multinationality in OLS is greater than the estimate of multinationality at 50th for all measures of multinationality. As a result, our findings provide evidence that the estimate of OLS can underestimate the effect of multinationality compared to the estimate of a quantile regression. Given this finding, the effect of multinationality could be, in fact, far greater than figures turned up in the extant studies employing OLS. Moreover, we find that, the effect of multinationality sharply jumps up at the range of the highly valued firms. Thus, compared to the previous studies which mainly rely on the OLS regression, this study could provide a more comprehensive pictures regarding the relationship between the corporate value and multinationality.
Abstract
Ⅰ. Introduction
Ⅱ. Research Design
Ⅲ. Empirical Results
Ⅳ. Discussions and Conclusions
References
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