Post by fireopal on Apr 2, 2010 7:29:56 GMT 4
Going Public Abroad
Cecilia Caglio
U.S. Securities and Exchange Commission (SEC)
Kathleen Weiss Hanley
Federal Reserve Board
Jennifer Marietta-Westberg
U.S. Securities and Exchange Commission
March 16, 2010
Abstract:
The issuance of initial public offerings (IPOs) of firms outside their home country is an important component of the increased globalization of capital flows. Approximately 6% of all companies that conduct an IPO do so outside their country of origin. Economically, foreign IPOs are a significant fraction of the percentage of proceeds raised by all IPOs. In many years, the percentage of gross proceeds raised by foreign IPOs to domestic IPOs approaches 20%. In this study, we document that firms conducting an IPO outside their home market are larger and more mature than the IPOs issued within the home market. These IPOs also originate in countries with significantly lower measures of market development and financial reform than their domestic IPO counterparts. We show that the time series of IPOs and cross-listings are not highly correlated through the sample period, indicating that the factors underlying the decision to list outside the country of origin may differ between the two. Indeed, foreign IPOs appear to be motivated by access to better stock markets while cross-listings are motivated by better bond markets and greater financial reform. Finally, we present evidence on the debate surrounding market competitiveness. Consistent with perception, U.S. markets have lost market share in the number of foreign IPOs compared to both the U.K. and Hong Kong. In terms of gross proceeds, however, our results indicate that despite this loss, the U.S. has gross foreign proceeds from 2001-2005 that are 10 times greater than the gross proceeds raised in the U.K.. Hong Kong has begun to attract large listings at the end of the sample period that put the gross proceeds on par with the U.S.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1572949_code16645.pdf?abstractid=1572949&mirid=2
Cecilia Caglio
U.S. Securities and Exchange Commission (SEC)
Kathleen Weiss Hanley
Federal Reserve Board
Jennifer Marietta-Westberg
U.S. Securities and Exchange Commission
March 16, 2010
Abstract:
The issuance of initial public offerings (IPOs) of firms outside their home country is an important component of the increased globalization of capital flows. Approximately 6% of all companies that conduct an IPO do so outside their country of origin. Economically, foreign IPOs are a significant fraction of the percentage of proceeds raised by all IPOs. In many years, the percentage of gross proceeds raised by foreign IPOs to domestic IPOs approaches 20%. In this study, we document that firms conducting an IPO outside their home market are larger and more mature than the IPOs issued within the home market. These IPOs also originate in countries with significantly lower measures of market development and financial reform than their domestic IPO counterparts. We show that the time series of IPOs and cross-listings are not highly correlated through the sample period, indicating that the factors underlying the decision to list outside the country of origin may differ between the two. Indeed, foreign IPOs appear to be motivated by access to better stock markets while cross-listings are motivated by better bond markets and greater financial reform. Finally, we present evidence on the debate surrounding market competitiveness. Consistent with perception, U.S. markets have lost market share in the number of foreign IPOs compared to both the U.K. and Hong Kong. In terms of gross proceeds, however, our results indicate that despite this loss, the U.S. has gross foreign proceeds from 2001-2005 that are 10 times greater than the gross proceeds raised in the U.K.. Hong Kong has begun to attract large listings at the end of the sample period that put the gross proceeds on par with the U.S.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1572949_code16645.pdf?abstractid=1572949&mirid=2