Relative Industry Valuation and Cross-Border Listing

63 Pages Posted: 6 Feb 2018 Last revised: 17 Jul 2020

See all articles by Kee-Hong Bae

Kee-Hong Bae

York University - Schulich School of Business

Yi Ding

Chinese University of Hong Kong, Shenzhen

Xiaoqiao Wang

The Chinese University of Hong Kong, Shenzhen

Date Written: July 15, 2020

Abstract

Using a sample of firms from 40 countries cross-listed in the U.S. during the 1982–2018 period, we find that the discrepancy between a firm’s home industry valuation and its corresponding U.S. industry valuation—the relative industry valuation—is an important factor in the listing decision and valuation after listing. International firms whose home market industries are undervalued relative to the corresponding U.S. industries are more likely to cross-list. They also enjoy permanent valuation gains after listing. These firms issue more equity, invest more, and realize higher growth rates.

Keywords: Cross-listing; Industry Segmentation; Relative Industry Valuation; Valuation Gains

JEL Classification: F30, G32, G15

Suggested Citation

Bae, Kee-Hong and Ding, Yi and Wang, Xiaoqiao, Relative Industry Valuation and Cross-Border Listing (July 15, 2020). Journal of Banking and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3112222 or http://dx.doi.org/10.2139/ssrn.3112222

Kee-Hong Bae (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 ext) 20248 (Phone)
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Yi Ding

Chinese University of Hong Kong, Shenzhen ( email )

2001 Longxiang BlVD
308 Zhiren
Shenzhen, Guangdong 518100
China

Xiaoqiao Wang

The Chinese University of Hong Kong, Shenzhen ( email )

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