Vagabond Shoes Longing to Stray ­Why Israeli Firms List in New York Causes and Implications

Asher Blass () and Yishay Yafeh ()
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Yishay Yafeh: The Hebrew University of Jerusalem

No 1998.02, Bank of Israel Working Papers from Bank of Israel

Abstract: There are more Israeli firms listed in New York than firms from any other foreign country, except Canada. Using data on Israeli IPO's in New York and Tel Aviv in the 1990's, we show that firms issuing equity in New York are high­-tech and expot-r­oriented. We interpret the results as evidence that US capital markets are better able to evaluate firms with few tangible assets. We also show that New York IPO's exhibit significantly higher post-­issue returns than Tel ­Aviv IPO's. We suggest that Israeli corporations signal that they are of high quality by issuing in the US, so that good firms prefer to list their shares there, rather than domestically. Finally, we present similarities between Israeli and Dutch stock issues in the US.

Pages: 31 pages
Date: 1998-01
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