 Internationalization and the evolution of corporate valuationJuan Carlos Gozzi (), Ross Levine () and Sergio Schmukler Journal of Financial Economics, 2008, vol. 88, issue 3, 607-632 Abstract: By documenting the evolution of Tobin's q before, during, and after firms internationalize, this paper provides evidence on the bonding, segmentation, and market-timing theories of internationalization. We find that Tobin's q does not rise after internationalization, even relative to domestic firms. Instead, q rises significantly before and during the internationalization year, but then falls sharply in the following year, quickly relinquishing the increases of the previous years. In decomposing these dynamics, we find that market capitalization rises before internationalization and remains high, while corporate assets increase during internationalization. The evidence supports the theory that financial internationalization facilitates corporate expansion, but challenges the theory that internationalization produces an enduring effect on q by bonding firms to a better corporate governance system. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:88:y:2008:i:3:p:607-632 Access Statistics for this article Journal of Financial Economics is currently edited by G. William Schwert More articles in Journal of Financial Economics from Elsevier |
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