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Are multinational firms riskier than purely domestic firms? What data would you need to address this...

Are multinational firms riskier than purely domestic firms? What data would you need to address this question?

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The results of which type of firm is more riskier can vary according the customer segment the firm is dealing with, what type of products the firms offer, and the currency strengths of the multi national firm’s parent currency.
If the domestic firm is dealing in products which are to be continuously needed by the domestic country customer segment, then there won’t be any additional risk. But if the demand of the products vary according to season, or the trend, then multinational companies would be better as they would be still selling their products in the different countries where there is a requirement as of the season or the trend. So based on changing factors in a domestic economy, and worldwide, domestic firms tend to be more riskier than multinational firms.

Currency rate of exchange is something which can affect the multinational in both positive and negative sense depending on the countries the company is having it’s assets and sales, though the domestic company only depends on the domestic currency strength, so to figure out which type of company is more riskier we need to know the data about the currency change rate and the currencies the companies are dealing in.

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