The effect of diversifying international investments on the value of the enterprise - an applied study in Jordanian international banks

Abstract

The subject of diversifying international investments includes distributing these investments in different countries that provide suitable conditions for investment, that is, the presence of an encouraging investment environment for the parent company. These companies are called multinational companies (crossing borders), and this diversification leads to reducing risk and enhancing return. It is not reasonable for all countries to be exposed to the same economic and political conditions at the same time. These conditions vary from one country to another, and therefore the degree of risk will be different according to countries. However, there are some factors. The degree of risk will be different according to countries. Influencing both return and risk, most notably exchange rates, interest rate rates, and inflation.
Diversifying investments reduces the possibility of them being exposed to risks. If one is exposed to these risks, the other is protected from them. We cite what was mentioned in the Holy Qur’an from the words of God Almighty on the tongue of His Prophet Jacob, peace be upon him, advising his children by saying: (O my sons, do not enter through one gate, but enter through separate gates) in order to ward off the possibility of danger. If one of them is exposed to danger, the other will be safe from it.