Are There Permanent Valuation Gains to Overseas Listings?
51 Pages Posted: 2 Aug 2004 Last revised: 10 Oct 2007
Date Written: February 15, 2007
This paper tests whether foreign equity listings are associated with permanent valuation gains and examines how market and firm characteristics influence any valuation effects. Using a global sample of 1676 listings placed in 25 countries, we find that much of the valuation gains to overseas listings are not permanent. The transitory nature of valuation gains holds for both average U.S. listings and average first-time firm listings. We find little evidence of a permanent effect on returns for firms that list abroad, even for firms' listings in markets that are more liquid, provide better legal protection, or have a larger shareholder base.
Keywords: Overseas Listing, International Cost of Capital, Cross Listing
JEL Classification: G15, G32
Suggested Citation: Suggested Citation