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The sequencing of stock market liberalization events and corporate financing decisions

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  • Thomas J. Flavin

    ()
    (Economics,Finance and Accounting, National University of Ireland, Maynooth)

  • Thomas O'Connor

    ()
    (Economics,Finance and Accounting, National University of Ireland, Maynooth)

Abstract

We examine if the sequence of stock market liberalization events matters for corporate financing choices. We contrast firms who attain ‘investable’ status through domestic reforms with those who do so by issuing American Depository Receipt programs. We find that the first liberalization event prompts similar corporate responses regardless of the path followed. However, we find differential effects between firms who issue ADRs after realizing financial liberalization and those who use ADR initiations to achieve this status. Here, the sequence matters and the capital structure choices of the two groups are very different.

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Bibliographic Info

Paper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n2021009.pdf.

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Length: 25 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:may:mayecw:n2021009.pdf

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Keywords: Financing choices; Debt structure; Investability; Cross listing;

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  1. Geert Bekaert & Campbell R. Harvey & Christian Lundblad, 2004. "Does Financial Liberalization Spur Growth?," Working Paper Research 53, National Bank of Belgium.
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Citations

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Cited by:
  1. Thomas O'Connor, 2012. "Legal bonding, investor recognition, and cross-listing premia in emerging markets," Economics, Finance and Accounting Department Working Paper Series n226-12.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  2. Thomas O'Connor & Thomas Flavin, 2013. "The Effects of Ownership Structure on Corporate Financing Decisions: Evidence from Stock Market Liberalization," International Review of Finance, International Review of Finance Ltd., vol. 13(3), pages 383-405, 09.
  3. Kearney, Colm, 2012. "Emerging markets research: Trends, issues and future directions," Emerging Markets Review, Elsevier, vol. 13(2), pages 159-183.
  4. Buchanan, Bonnie G. & English II, Philip C. & Gordon, Rachel, 2011. "Emerging market benefits, investability and the rule of law," Emerging Markets Review, Elsevier, vol. 12(1), pages 47-60, March.

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