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Are There Permanent Valuation Gains to Overseas Listing? Evidence from Market Sequencing and Selection

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Author Info
Sarkissian, Sergei (McGrill U)
Schill, Michael J. (U of Virginia)

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Abstract

This paper tests whether foreign equity exchange listings are associated with permanent valuation gains and examines how market and firm characteristics influence any valuation effects. Using a sample of 1256 listings placed in 24 countries, we find that much of the valuations gains to overseas listings are transitory such that the permanent gains are more modest than reported in earlier studies. We document the uniqueness of a firm's first foreign listing and provide some support for diminishing gains to multiple overseas listing. We find that market size, liquidity, legal protection, and disclosure requirements maintain some role in explaining cross-listing valuation effects. The results suggest, however, that cross-product market trade provides the dominant influence on permanent firm valuation gains, emphasizing the role of investor familiarity on global asset valuation.

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Paper provided by University of Pennsylvania, Wharton School, Weiss Center in its series Working Papers with number 05-4.

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Date of creation: Oct 2004
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Handle: RePEc:ecl:upafin:05-4

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G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Doidge, Craig & Karolyi, G. Andrew & Stulz, Rene, 2007. "Has New York Become Less Competitive in Global Markets? Evaluating Foreign Listing Choices over Time," Working Paper Series 2007-9, Ohio State University, Charles A. Dice Center for Research in Financial Economics. [Downloadable!]
  2. Cécile Carpentier & Jean-François L'Her & Jean-Marc Suret, 2009. "Long-run Performance Following Cross-Listing: A Re-examination," CIRANO Working Papers 2007s-25, CIRANO. [Downloadable!]
  3. Hail, Luzi & Leuz, Christian, 2005. "Cost of Capital and Cash Flow Effects of U.S. Cross Listings," Working Papers 05-2, University of Pennsylvania, Wharton School, Weiss Center. [Downloadable!]
  4. Michael R. King & Dan Segal, 2006. "The Long-Term Effects of Cross-Listing Investor Recognition, and Ownership Structure on Valuation," Working Papers 06-44, Bank of Canada. [Downloadable!]
    Other versions:
  5. Craig Doidge & G. Andrew Karolyi & Rene M. Stulz, 2007. "Has New York Become Less Competitive in Global Markets? Evaluating Foreign Listing Choices Over Time," NBER Working Papers 13079, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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