The paper "Global Diversification, Industrial Diversification, and Firm Value" by David J. Denis, Diane K. Denis, and Keven Yost examines the relationship between global and industrial diversification and their impact on firm value. Using a sample of 27,287 firm-years from 1984 to 1993, the authors document an increasing trend in both global and industrial diversification over time. However, they find that global diversification does not substitute for industrial diversification. Instead, both forms of diversification lead to significant valuation discounts relative to single-segment, purely domestic firms. The study also reveals that increases in global diversification reduce excess value, while reductions in global diversification increase excess value. Multivariate analysis further supports these findings, showing that being globally diversified is associated with a diversification discount similar to that of being industrially diversified. The results suggest that global and industrial diversification are complementary strategies, with both forms of diversification together increasing firm value, while either form alone reduces it.The paper "Global Diversification, Industrial Diversification, and Firm Value" by David J. Denis, Diane K. Denis, and Keven Yost examines the relationship between global and industrial diversification and their impact on firm value. Using a sample of 27,287 firm-years from 1984 to 1993, the authors document an increasing trend in both global and industrial diversification over time. However, they find that global diversification does not substitute for industrial diversification. Instead, both forms of diversification lead to significant valuation discounts relative to single-segment, purely domestic firms. The study also reveals that increases in global diversification reduce excess value, while reductions in global diversification increase excess value. Multivariate analysis further supports these findings, showing that being globally diversified is associated with a diversification discount similar to that of being industrially diversified. The results suggest that global and industrial diversification are complementary strategies, with both forms of diversification together increasing firm value, while either form alone reduces it.