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The cost of capital effects of overseas listings: Market sequencing and selection
| Content Provider | Semantic Scholar |
|---|---|
| Author | Sarkissian, Sergei Schill, Michael J. |
| Copyright Year | 2003 |
| Abstract | Using a broad sample of 1298 overseas listings spanning most world markets, we examine the long-run times-series and cross-sectional behavior of returns for firms choosing to list in foreign markets. Over an extended event window of ten years before and after the listing, we identify short-term and long-term patterns in firm returns that vary with different home and host markets for securities, listing sequencing, and firm characteristics. Controlling for the temporary return effects associated with exchange listing, we find that the cost of capital gains to overseas listings are more modest than those reported in earlier studies: the average cost of capital decline is 2.5 percentage points for the entire sample of cross-listings and 5.9 percentage points for non-U.S. stocks listed in the U.S. We find that contrary to the conventional notion of international diversification in segmented markets, firms that list across markets with low return correlation experience relatively little to negative improvements in cost of capital. Rather, our evidence suggests that firms obtain the most substantial improvements in cost of capital by listing in markets with better shareholder protection. JEL classification: G15; G32 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.fsa.ulaval.ca/nfa2003/papiers/Michael%20J.%20Schill.pdf |
| Alternate Webpage(s) | http://fisher.osu.edu/fin/dice/seminars/costofcapital.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
