The Sequencing of Stock Market Liberalization Events and Corporate Financing Decisions

25 Pages Posted: 12 Jan 2010

See all articles by Thomas Flavin

Thomas Flavin

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

Thomas O’Connor

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

Date Written: January 12, 2010

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.

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

JEL Classification: F30, G15, G32

Suggested Citation

Flavin, Thomas J and O'Connor, Thomas, The Sequencing of Stock Market Liberalization Events and Corporate Financing Decisions (January 12, 2010). Available at SSRN: https://ssrn.com/abstract=1535471 or http://dx.doi.org/10.2139/ssrn.1535471

Thomas J Flavin

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting ( email )

County Kildare
Ireland
+353 1 708 3369 (Phone)
+353 1 708 3934 (Fax)

Thomas O'Connor (Contact Author)

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting ( email )

County Kildare
Ireland

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