This paper examines the effect of industrial diversification on asymmetric information based on global samples. We use the international data from 28 countries in America, Europe and Asia during the period between 2000 and 2006 to test how corporate diversification affects the degree of asymmetric information across different ownership structures. The empirical results show that diversification will raise information asymmetry. In general, the increase of ownership of managing owners raises the levels of asymmetric information, but the marginal effect varies across the ownership structure.For the marginal effect of diversification, the level of asymmetric information is significantly higher for the diversified firms when the ownership of managing owners is
lower than a certain level (10% or 30%). This suggests that there are more entrenchment effects for diversified firms. In contrast, the level of asymmetric information is significantly lower for the diversified firms when the ownership is more than a certain level (30%). In this
case, there are alignment effects.