Pricing of Domestic versus Multinational Companies

Thierry Lombard, Jacques Roulet and Bruno Solnik

Financial Analysts Journal, 1999, vol. 55, issue 2, 35-49

Abstract: World financial markets are becoming integrated. Hence, global factors rather than domestic factors should dominate the pricing of stocks. All the empirical studies published until the mid-1990s, however, reported that stock prices respond primarily to domestic factors. In other words, the pricing of a company's stock is driven predominantly by the primary location of its stock listing rather than by the nature and geographical breakdown of its activities. We challenge this vision of international market pricing. We have found that stock pricing, at least for non-U.S. companies, is strongly influenced by the extent of the company's nondomestic activities. This finding has implications for the organization of global equity research departments and for the structure of the investment process.

Date: 1999
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.2469/faj.v55.n2.2259 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ufajxx:v:55:y:1999:i:2:p:35-49

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ufaj20

DOI: 10.2469/faj.v55.n2.2259

Access Statistics for this article

Financial Analysts Journal is currently edited by Maryann Dupes

More articles in Financial Analysts Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().