Financial Development, Internationalisation and Firm Value

Thomas O’Connor
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Thomas O’Connor: Thomas O’Connor, Department of Economics, Finance and Accounting, National University of Ireland Maynooth, Maynooth Co. Kildare, Ireland. E-mail: thomas.g.oconnor@nuim.ie

Journal of Emerging Market Finance, 2011, vol. 10, issue 1, 21-71

Abstract: In this article I show that both aspects of financial development, namely, liberalisation and deepening, and financial internationalisation proxied using cross-listings in the US creates value for emerging market firms. Financial deepening, or more precisely, stock market deepening enhances value. In contrast, bank sector deepening only serves to reduce value because it is associated with large-scale corporate expansion and a fall in market capitalisation. Like others, I document a cross-listing premium for Level 2/3 cross-listings in the US. The cross-listing premium is typically less than the gains from financial liberalisation, but they are similar in magnitude over the period examined.

Keywords: JEL Classification: G15; JEL Classification: F36; Financial liberalisation; financial deepening; internationalisation; Tobin’s q (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:10:y:2011:i:1:p:21-71

DOI: 10.1177/097265271101000102

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