Internationalization and the Evolution of Corporate Valuation

By documenting the evolution of Tobin's q before, during, and after firms internationalize, this paper provides evidence on the bonding, segmentation, and market-timing theories of internationalization. We find that Tobin's q does not rise after internationalization, even relative to domes...

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Main Authors:	Gozzi, Juan Carlos, Levine, Ross, Schmukler, Sergio L.
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Multinational Firms International Business F230 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340
Online Access:	http://hdl.handle.net/10986/5798

id	okr-10986-5798
recordtype	oai_dc
spelling	okr-10986-57982021-04-23T14:02:23Z Internationalization and the Evolution of Corporate Valuation Gozzi, Juan Carlos Levine, Ross Schmukler, Sergio L. Multinational Firms International Business F230 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340 By documenting the evolution of Tobin's q before, during, and after firms internationalize, this paper provides evidence on the bonding, segmentation, and market-timing theories of internationalization. We find that Tobin's q does not rise after internationalization, even relative to domestic firms. Instead, q rises significantly before and during the internationalization year, but then falls sharply in the following year, quickly relinquishing the increases of the previous years. In decomposing these dynamics, we find that market capitalization rises before internationalization and remains high, while corporate assets increase during internationalization. The evidence supports the theory that financial internationalization facilitates corporate expansion, but challenges the theory that internationalization produces an enduring effect on q by bonding firms to a better corporate governance system. 2012-03-30T07:34:36Z 2012-03-30T07:34:36Z 2008 Journal Article Journal of Financial Economics 0304405X http://hdl.handle.net/10986/5798 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Multinational Firms International Business F230 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340
spellingShingle	Multinational Firms International Business F230 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Mergers Acquisitions Restructuring Voting Proxy Contests Corporate Governance G340 Gozzi, Juan Carlos Levine, Ross Schmukler, Sergio L. Internationalization and the Evolution of Corporate Valuation
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	By documenting the evolution of Tobin's q before, during, and after firms internationalize, this paper provides evidence on the bonding, segmentation, and market-timing theories of internationalization. We find that Tobin's q does not rise after internationalization, even relative to domestic firms. Instead, q rises significantly before and during the internationalization year, but then falls sharply in the following year, quickly relinquishing the increases of the previous years. In decomposing these dynamics, we find that market capitalization rises before internationalization and remains high, while corporate assets increase during internationalization. The evidence supports the theory that financial internationalization facilitates corporate expansion, but challenges the theory that internationalization produces an enduring effect on q by bonding firms to a better corporate governance system.
format	Journal Article
author	Gozzi, Juan Carlos Levine, Ross Schmukler, Sergio L.
author_facet	Gozzi, Juan Carlos Levine, Ross Schmukler, Sergio L.
author_sort	Gozzi, Juan Carlos
title	Internationalization and the Evolution of Corporate Valuation
title_short	Internationalization and the Evolution of Corporate Valuation
title_full	Internationalization and the Evolution of Corporate Valuation
title_fullStr	Internationalization and the Evolution of Corporate Valuation
title_full_unstemmed	Internationalization and the Evolution of Corporate Valuation
title_sort	internationalization and the evolution of corporate valuation
publishDate	2012
url	http://hdl.handle.net/10986/5798
_version_	1764396335976415232

Internationalization and the Evolution of Corporate Valuation

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