Does cross listing in the USA really enhance the value of emerging market firms?
Purpose – The purpose of this paper is to study the valuation effects of cross listing in the USA for a panel of emerging market firms over the period from 1990 to 2003. Design/methodology/approach – Using firm-level data from Worldscope, the paper examines the valuation effects of listing in the USA for a panel of emerging market firms. Specifically, the following techniques are employed in order to control for self-selection bias: calculate the average effect of the treatment on the treated using propensity score matching, pooled ordinary least squares with Mundlak corrections, firm-fixed effects, and panel treatment effects models. Findings – In line with previous researches, only those firms from high-disclosure regimes gain from Level 2/3 listing in the USA. The gains are not immediate, but materialize once the firm has listed in the USA for at least five years. Also documented were long-term, but not immediate valuation gains for Level 1 over-the-counterissues. In contrast to Level 2/3 issues, the gains are concentrated amongst firms from low-disclosure regimes. No positive valuation effects were found for Rule 144a private placements. The results suggest that the decision on the part of the majority of firms from low-disclosure regimes not to list as exchange traded depositary receipts is warranted. Research limitations/implications – It may have been interesting to further examine the causes of the results. For example, it would have been interesting to see how firm visibility (media and analyst coverage), liquidity, and capital issuance changed around the time of listing. However, data availability prevented such an analysis. Originality/value – As opposed to standard event studies, this paper examines the effect of listing on firm value using valuation metrics, i.e. Tobin's q. Second, and unlike event studies, the techniques employed are substantially more robust to self-selection bias.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 8 (2009)
Issue (Month): 3 (August)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=raf Email:
When requesting a correction, please mention this item's handle: RePEc:eme:rafpps:v:8:y:2009:i:3:p:308-336. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.