Is financial globalization in reverse after the global financial crisis? Evidence from corporate valuations - ANNULE
Due to a negative travel advice because of the coronavirus CONVID-19 professor Stulz has decided not to come to Brussels.
Non-US firms have lower valuations than similar US firms. We study the evolution of this valuation gap to assess whether financial markets have become less integrated after the global financial crisis (GFC). The valuation gap for firms from developed markets (DMs) increases by 31% after the GFC – a reversal in financial globalization – while the gap for firms from emerging markets (EMs) (excluding China) stays stable. Among the subset of non-US firms that are secondarily cross-listed on major US exchanges, there is no evidence of greater segmentation whether they are from EMs or DMs. The typical valuation premium of cross-listed firms relative to their purely-domestic counterparts also stays unchanged after the GFC.