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International Listings and Stock Returns: Some Empirical Evidence

Published online by Cambridge University Press:  06 April 2009

Gordon J. Alexander ,
Cheol S. Eun  and
S. Janakiramanan
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Abstract

Segmentation of capital markets produces incentives for firms to adopt countermeasures, one of which is dually listing their stocks on foreign capital markets. In this paper, the behavior of stock returns surrounding such international listings is examined for a sample of firms. Assuming that the capital markets are either completely or “mildly” segmented beforehand, it is hypothesized that the international listing of a security should, in general, accompany a reduction in its expected return. The sample reveals evidence consistent with this hypothesis.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 23 , Issue 2 , June 1988 , pp. 135 - 151
Copyright
Copyright © School of Business Administration, University of Washington 1988

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