Relative Industry Valuation and Cross-Border Listing
63 Pages Posted: 6 Feb 2018 Last revised: 17 Jul 2020
Date Written: July 15, 2020
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: Suggested Citation