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Internationalization and firm valuation: New evidence from first offshore bond issuances of US firms

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  • Nebosja Dimic
  • Vitaly Orlov

Abstract

Does internationalization affect firm valuation? To answer this question, literature mainly considers firms from around the world internationalizing by issuing equity in the USA, whereas the current study focuses on US firms that internationalize by issuing debt in overseas markets. This paper provides evidence on theories of internationalization and capital structure, finding that overseas corporate debt offerings have a positive short-term effect on US firms' valuations. The effect varies in firm characteristics, timing, and the location of the issue. Additionally, firms with a strong need for external funds and growth prospects accelerate their offshore public debt market entry.

Suggested Citation

  • Nebosja Dimic & Vitaly Orlov, 2018. "Internationalization and firm valuation: New evidence from first offshore bond issuances of US firms," Working Papers on Finance 1803, University of St. Gallen, School of Finance.
    • Handle: RePEc:usg:sfwpfi:2018:03
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    More about this item

    Keywords

    Internationalization; Debt Structure; Segmentation; Tobins's q;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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