Kingsley Olibe, Robert Strawser and
William Strawser
Journal of Accounting and Finance, Vol. 11, Issue 2, pages 26-52.

This paper empirically tests whether international diversification is associated with market value and debt. Specifically, we relate the levels of equity and debt to firms’ foreign assets and foreign sales. We find that market value is positively related to international diversification, indicating significant gains to share-holders of these firms. Alternatively, the level of debt is positively (negatively) associated with the level of foreign assets (foreign sales. We also consider whether debt levels alter the valuation of foreign assets and foreign sales, finding that the association between market value and foreign assets is stronger for highly-leveraged firms.