Internationalization and the evolution of corporate valuation /

Internationalization and the evolution of corporate valuation /

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Bibliographic Details
Author / Creator:	Gozzi, Juan Carlos.
Imprint:	Washington, D.C. : World Bank, Development Research Group, Growth and Investment Team, 2006.
Description:	47 p. : ill. ; 28 cm.
Language:	English
Series:	Policy research working paper ; 3933 Policy research working papers ; 3933.
Subject:	Globalization -- Econometric models. International business enterprises -- Econometric models. Corporations -- Valuation -- Mathematical models. Globalization -- Economic aspects -- Mathematical models.
Format:	E-Resource Print Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/6020024

Hidden Bibliographic Details
Other authors / contributors:	Levine, Ross. Schmukler, Sergio L. World Bank. Development Research Group. Growth and Investment Team.
Notes:	"June 2006"--Cover. Includes bibliographical references (p. 30-34). Also available on the World Wide Web.
Summary:	By documenting the evolution of Tobin's q before, during, and after firms internationalize, the authors provide evidence on the bonding, segmentation, and market timing theories of internationalization. Using new data on 9,096 firms across 74 countries over the period 1989-2000, they find that Tobin's q does not rise after internationalization, even relative to firms that do not internationalize. Instead, q rises significantly before internationalization and during the internationalization year. But then q falls sharply in the year after internationalization, quickly relinquishing the increases of the previous years. To account for these dynamics, the authors show that market capitalization rises before internationalization and remains high, while corporate assets increase during internationalization. The evidence supports models stressing that financial internationalization facilitates corporate expansion, but challenges models stressing that internationalization produces an enduring effect on q by bonding firms to a better corporate governance system.

Mansueto

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Call Number:	HG3879.P6 no.3933
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