This paper analyzes the impact of geographic diversification on bank value by employing a data set comprising the largest banks across the world, originating from both developed and emerging countries. The findings suggest that the value impact of international diversification depends on the financial development level of a bank’s home country: higher levels of diversification are associated with changes in valuations only for banks originating from emerging countries. In addition, the locus of internationalization matters for the direction of effects: while markets respond positively to the intra-regional expansion activities of emerging country banks, they seem to believe that these banks cannot benefit from diversifying into far away markets
