U.S. International Equity Investment

John Ammer, Sara B. Holland, David C. Smith and Francis Warnock

No 17839, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: U.S. investors are the largest group of international equity investors in the world, but to date conclusive evidence on which types of foreign firms are able to attract U.S. investment is not available. Using a comprehensive dataset of all U.S. investment in foreign equities, we find that the single most important determinant of the amount of U.S. investment a foreign firm receives is whether the firm cross-lists on a U.S. exchange. Correcting for selection biases, cross-listing leads to a doubling (or more) in U.S. investment, an impact greater than all other factors combined. We also show that our firm-level analysis has implications for country-level studies, suggesting that research investigating equity investment patterns at the country-level should include cross-listing as an endogenous control variable. We describe easy-to-implement methods for including the importance of cross-listing at the country level.

JEL-codes: F3 G11 (search for similar items in EconPapers)
Date: 2012-02
New Economics Papers: this item is included in nep-bec
Note: IFM
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Citations: View citations in EconPapers (22)

Published as Journal of Accounting Research. Volume 50, Issue 5, pages 1109–1139, December 2012

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