Wednesday, September 10, 2008

Why do foreign firms go home?

New working paper studying 59 foreign firms that decided to de-list from the US equity markets:
Our evidence supports the hypothesis that foreign firms list shares in the U.S. in order to raise capital at the lowest possible cost to finance growth opportunities and that, when those opportunities disappear, a listing becomes less valuable to corporate insiders so that firms are more likely to deregister and go home.


  1. So isn't this a bit like saying, "Our evidence supports the hypothesis (reality, really) that water flows downhill"?

  2. Your link seems to be broken, but interested readers should also see:

    Hostak, Karaoglu, Lys and Yang