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International financial integration through equity markets : which firms from which countries go global ?

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Author Info
Claessens, Stijn
Schmukler, Sergio L.

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Abstract

The authors study international financial integration analyzing firms from various countries raising capital, trading equity, and cross-listing in major world stock markets. Using a large sample of 39,517 firms from 111 countries covering the period 1989-2000, they find that, although international financial integration increases substantially over this period, only relatively few countries and firms actively participate in international markets. Firms more likely to internationalize are from larger and more open economies, with higher income, better macroeconomic policies, and worse institutional environments. These firms tend to be larger, grow faster, and have higher returns and more foreign sales. While changes occur with internationalization, these firm attributes are present before internationalization takes place. The results suggest that international financial integration will likely remain constrained by country and firm characteristics.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4146.

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Date of creation: 01 Mar 2007
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Handle: RePEc:wbk:wbrwps:4146

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Keywords: Microfinance Small Scale Enterprise Economic Theory & Research Markets and Market Access Investment and Investment Climate

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  5. Graciela Kaminsky & Sergio Schmukler, 2003. "Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization," NBER Working Papers 9787, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. M. Ayhan Kose & Eswar Prasad & Kenneth S. Rogoff & Shang-Jin Wei, 2006. "Financial Globalization: A Reappraisal," NBER Working Papers 12484, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Sergei Sarkissian, 2004. "The Overseas Listing Decision: New Evidence of Proximity Preference," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 17(3), pages 769-809. [Downloadable!] (restricted)
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  18. Gozzi, Juan Carlos & Levine, Ross & Schmukler, Sergio L., 2006. "Internationalization and the evolution of corporate valuation," Policy Research Working Paper Series 3933, The World Bank. [Downloadable!]
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  23. Ross Levine & Sergio Schmukler, 2006. "Internationalization and Stock Market Liquidity," Review of Finance, Springer, vol. 10(1), pages 153-187, 03. [Downloadable!] (restricted)
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  24. Claessens, Stijn & Klingebiel, Daniela & Schmukler, Sergio L., 2006. "Stock market development and internationalization: Do economic fundamentals spur both similarly?," Journal of Empirical Finance, Elsevier, vol. 13(3), pages 316-350, June. [Downloadable!] (restricted)
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  30. Noronha, Gregory M. & Sarin, Atulya & Saudagaran, Shahrokh M., 1996. "Testing for micro-structure effects of international dual listings using intraday data," Journal of Banking & Finance, Elsevier, vol. 20(6), pages 965-983, July. [Downloadable!] (restricted)
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  1. Cécile Carpentier & Jean-François L'Her & Jean-Marc Suret, 2007. "Is the Long-Run Performance of Cross-Listed Firms Anomalous?," CIRANO Working Papers 2007s-25, CIRANO. [Downloadable!]
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