Are There Permanent Valuation Gains to Overseas Listings?
McGill University; Yerevan State University
Michael J. Schill
University of Virginia Darden School of Business
February 15, 2007
Darden School of Business Working Paper No. 03-03
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.
Number of Pages in PDF File: 51
Keywords: Overseas Listing, International Cost of Capital, Cross Listing
JEL Classification: G15, G32
Date posted: August 2, 2004 ; Last revised: October 10, 2007