This study examines the trends in global and industrial diversification and their impact on firm value using a sample of 27,287 firm-years from 1984 to 1993. The findings show an increasing trend in global diversification over time, with a greater fraction of U.S. firms having international operations in 1993 compared to 1984. However, industrial diversification has declined during the same period. The study finds no evidence that global diversification substitutes for industrial diversification at the firm level; instead, global and industrial diversification are positively correlated. Both global and industrial diversification are associated with valuation discounts relative to single-segment, domestic firms. These discounts are significant and consistent across the 1984-1988 and 1989-1993 subperiods. Firms that are either globally or industrially diversified experience negative excess values, while those that cease being diversified see increases in excess value. The study also finds that the valuation effects of diversification are not solely due to poorly performing firms choosing to diversify. Changes in diversification status are associated with changes in excess value, with firms experiencing significant declines in excess value when they become diversified. Overall, the study concludes that global and industrial diversification have negative valuation effects on average, and that increased global diversification has not translated into value-creation opportunities for the majority of U.S. firms. The results suggest that diversification strategies may be driven by managerial incentives rather than purely economic considerations.This study examines the trends in global and industrial diversification and their impact on firm value using a sample of 27,287 firm-years from 1984 to 1993. The findings show an increasing trend in global diversification over time, with a greater fraction of U.S. firms having international operations in 1993 compared to 1984. However, industrial diversification has declined during the same period. The study finds no evidence that global diversification substitutes for industrial diversification at the firm level; instead, global and industrial diversification are positively correlated. Both global and industrial diversification are associated with valuation discounts relative to single-segment, domestic firms. These discounts are significant and consistent across the 1984-1988 and 1989-1993 subperiods. Firms that are either globally or industrially diversified experience negative excess values, while those that cease being diversified see increases in excess value. The study also finds that the valuation effects of diversification are not solely due to poorly performing firms choosing to diversify. Changes in diversification status are associated with changes in excess value, with firms experiencing significant declines in excess value when they become diversified. Overall, the study concludes that global and industrial diversification have negative valuation effects on average, and that increased global diversification has not translated into value-creation opportunities for the majority of U.S. firms. The results suggest that diversification strategies may be driven by managerial incentives rather than purely economic considerations.