Exploring the Impact of Country Differences and Home Country Effect

We propose in this study revealed relatedness as a way to frame and capture more broadly the relatedness between two firms in two different countries. Revealed relatedness (RR) is the degree to which countries are efficiently combined within the investment portfolios of firms. Just as country distance, RR can be used as a proxy for the potential joint economies of operations and/or ownership of two average MNEs units in two different countries....