Are There Permanent Valuation Gains from Becoming Investable?

14 Pages Posted: 9 Jan 2011

See all articles by Thomas O’Connor

Thomas O’Connor

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

Date Written: January 9, 2011

Abstract

In this paper, I examine whether the “investable premium” documented by Mitton and O’Connor (2010) is permanent. In a series of firm-fixed effects regressions, I show that the “investability premium” disappears after five years of becoming investable, but subsequently reappears, and appears permanent. At the very least, the “investable premium” tends to last at least as long as some other “internationalization premia” documented in the literature, and remains even after 12 years of becoming investable. The premium persists, even after controlling for observable and unobservable firm-level characteristics, industry growth, and indirect investability.

Keywords: Investability, Tobin’s q, Internationalization

JEL Classification: G15, F36

Suggested Citation

O'Connor, Thomas, Are There Permanent Valuation Gains from Becoming Investable? (January 9, 2011). Available at SSRN: https://ssrn.com/abstract=1737253 or http://dx.doi.org/10.2139/ssrn.1737253

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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