Abstract
The primary objective of this study was to investigate the value of international diversification in hotel firms. The results show that although diversification discounts exist, the relationship between international diversification and excess value is curvilinear (U-shaped), suggesting that highly diversified hotel firms could still benefit from international diversification. The comparison between absolute market premium (excess market value) and relative market premium (excess Q) also indicates that international diversification can increase the value of intangible assets, but a firm’s ability to leverage its intangible assets through international diversification differs because of industry characteristics. Implications for the hotel industry are also discussed.
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