Diversification in Crisis: More Risk for Less-Developed Countries' Firms.
The study looked at how companies in Asia handled their money before and during a financial crisis. They found that having internal markets helps companies in countries with less advanced financial systems. Diversifying investments can lower risk in normal times, but during a crisis, companies with more diverse investments tend to do worse, especially in less developed countries. This suggests that taking more risks by diversifying and using internal markets more can be risky when outside markets are not well developed.