The nature of the foreign listing premium: A cross-country examination

Sergei Sarkissian and Michael J. Schill

Journal of Banking & Finance, 2012, vol. 36, issue 9, 2494-2511

Abstract: An expanding literature asserts that non-US firms achieve a unique valuation premium for listing on US equity markets. In this paper we test the uniqueness of the US foreign listing premium by examining the premium achieved by foreign listings across a global set of stock exchanges. We highlight that the documented valuation premium for listing on US exchanges is not unique but common to many home and host markets including US firms that list abroad. The cross-sectional variation in the valuation premium appears to have little association with such cross-country institutional features as investor protection rules, law enforcement practice, or accounting disclosure standards. Rather the premium appears most related to variation in pre-listing valuation ratios.

Keywords: Cross listings; Firm valuation; Rule of law; Disclosure; Stock exchanges; Tobin’s Q (search for similar items in EconPapers)
JEL-codes: G15 G32 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:36:y:2012:i:9:p:2494-2511

DOI: 10.1016/j.jbankfin.2012.05.007

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