Michael J. Schill
University of Virginia - Darden Graduate School of Business Administration
October 5, 2012
Using a 57-year global panel of foreign listings on a broad set of stock exchanges, we identify waves in foreign listing activity at the host market, home market, and industry levels. We document that waves in host markets are often due to cross-listing waves in home markets that share a particular affiliation with the respective host market. Furthermore, based on the implications of a gravity model, we find that cross-listing waves in a given host country coincide with the outperformance of both the host and proximate home country’s economy and financial markets relative to other competing markets. We also show that much of the valuation gains associated with foreign listing are associated with cross-listing waves, but that such gains are particularly transitory. Our results provide novel evidence of non-monotonic market development across countries and over time.
Number of Pages in PDF File: 67
Keywords: Firm valuation, Market competitiveness, Market timing; Proximity measure, Stock exchanges
JEL Classification: F3, F4, G15, G32working papers series
Date posted: August 22, 2008 ; Last revised: October 8, 2012
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