Click here for search results
Internationalization and the evolution of corporate valuation, Volume 1
Author:Gozzi, Juan Carlos; Levine, Ross; Schmukler, Sergio L.; Country:World;
Date Stored:2006/05/30Document Date:2006/06/01
Document Type:Policy Research Working PaperSubTopics:Small Scale Enterprise; Microfinance; Investment and Investment Climate; Economic Theory & Research; Markets and Market Access
Language:EnglishRegion:The World Region
Report Number:WPS3933Collection Title:Policy, Research working paper ; no. WPS 3933
Volume No:1  

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.

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 48 pagesOfficial version*0.34
TextText version**
How To Order

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.

Permanent URL for this page:

© 2016 The World Bank Group, All Rights Reserved. Legal