We provide evidence for the combined value impacts of corporate multinationality and business group affiliation, incorporating the effect of endogeneity of diversification decisions. The results for Japanese industrial firms indicate that multinational firms have a statistically significant 2.3% value premium during FY1995–2011 relative to comparable domestic firms; however, the multinationality premium is moderated by the nature of business group as well as the characteristics of the host country. Specifically, the multinationality premium is negatively associated with both keiretsu membership and main bank ownership of group firms. Main bank ownership as well as vertical keiretsu affiliation positively impact the value of multinationality for firms operating in developing countries. These results hold even during the later part of the sample period, when the keiretsu and main bank systems have been under pressure. The implication is that corporate multinationality is a substitute for business group and for inadequate indigenous institutional infrastructure.