بین المللی سازی و تکامل ارزش گذاری شرکت های بزرگ

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.

Between 1989 and 2000, almost 2,300 firms with a market capitalization of over eight trillion U.S. dollars “internationalized” by cross-listing, issuing depositary receipts, or raising equity capital in major financial centers. These “international firms” account for more than 40% of the market capitalization of their home markets and, in many countries, value traded abroad exceeds domestic market activity. Yet, there are sharp disagreements over the causes and effects of internationalization. To distinguish among theories of internationalization, we provide the first documentation of the evolution of Tobin's q and its components—corporate assets, market capitalization, and debt—before, during, and after firms internationalize. We also examine the time-series patterns of international firms relative to those of “domestic firms” (firms that do not internationalize) and thus abstract from country-specific factors influencing all firms within a country. To conduct the analysis, we compile a new database of over 9,000 international and domestic firms across 74 countries over the period 1989–2000, comprising almost 67,000 firm-year observations. The major findings are as follows. First, on average, firms that internationalize at some point in the sample have higher qs than firms that never internationalize, but this difference exists years before firms actually access international equity markets. Second, when comparing the average value of q in the years before firms internationalize with the average value of q in the years after they internationalize, we find that q does not change after internationalization, nor does it change relative to that of domestic firms. Thus, internationalization is not associated with an enduring change in q. Third, when tracing out the dynamics in more detail, we find that q peaks in the internationalization year, rising significantly before firms access international equity markets and then falling sharply afterwards. Indeed, one year after internationalization, the q of international firms is lower than one year before internationalization. Moreover, the temporary increase in q vanishes by the second year after internationalization. Fourth, while q does not change permanently after internationalization, its components do. Market capitalization rises before internationalization and remains high thereafter, while corporate assets and debt expand after internationalization. Thus, internationalization is associated with firm growth, with international firms expanding relative to domestic ones. The findings provide information on three views of internationalization. First, segmentation theories argue that firms internationalize to circumvent regulations, poor accounting systems, taxes, and illiquid domestic markets that discourage investors from purchasing their shares.1 Thus, internationalization can lower firms’ cost of capital and facilitate corporate expansion relative to firms that do not internationalize. These models do not predict, however, that internationalization produces an enduring increase in q. The reduction in the cost of capital increases the market value of corporate assets, which boosts q, but then firms increase their capital stock until the replacement cost of assets equals their market value, which reduces q ( Tobin and Brainard, 1977). 2 If the market anticipates that the firm will lower its capital costs by internationalizing, then q rises before the firm actually internationalizes, and then falls after internationalizing as the firm uses cheaper capital to expand. Although segmentation theories allow for a rise and fall in q, the drop in the cost of capital alone does not imply that internationalization induces a lasting increase in q. Our results are consistent with three key predictions from segmentation theories: (i) firms expand after they internationalize and grow relative to domestic firms that have not lowered their capital costs; (ii) q rises before internationalization and then quickly falls; and (iii) the qs of firms that internationalize do not increase relative those of domestic firms. Thus, segmentation models account for our main time-series and cross-sectional findings. Second, this paper also provides empirical evidence on “bonding” theories, which argue that firms internationalize to bond themselves to a better corporate governance framework. Improved governance both (i) lowers firms’ cost of capital, which facilitates firm expansion and (ii) reduces expropriation of corporate resources by firm insiders, which fosters an enduring increase in q. Like segmentation theories, bonding theories predict that internationalization lowers capital costs, causing q to rise and then fall as firms expand. Unlike segmentation theories, however, bonding models imply a long-run increase in q, as firms improve their corporate governance through internationalization. Thus, while bonding models predict that q will rise and then fall, these models also predict that (i) the long-run value of q will be higher after internationalization compared with before and (ii) the long-run qs of firms that internationalize will increase relative to those of domestic firms, which do not commit to a higher level of shareholder protection. There are two parts to the bonding view that internationalization boosts long-run q. First, corporate insiders can exploit their positions of control for private gain, with adverse implications for the price that others are willing to pay for the firm ( Jensen and Meckling, 1976). Thus, there is a wedge between the value of the firm to outsiders and insiders, who enjoy private benefits of control. Since market capitalization reflects the value of the firm to outsiders, the governance framework can influence steady-state q: the steady-state ratio of market capitalization plus debt to the replacement cost of assets. For example, some models show that better corporate governance reduces the diversion of firms’ cash-flows by insiders, which reduces the valuation wedge between insiders and outsiders and yields a higher q ( La Porta, Lopez-de-Silanes, Shleifer, and Vishny, 2002; Durnev and Kim, 2005). Others stress that better governance increases steady-state q by impeding value-reducing overinvestment that arises if the private benefits of control are positively associated with corporate investment ( Lan and Wang, 2004; Albuquerque and Wang, 2007). Empirical research finds that better governance boosts q ( Claessens, Djankov, Fan, and Lang, 2002; La Porta, Lopez-de-Silanes, Shleifer, and Vishny, 2002; Caprio, Laeven, and Levine, 2008). The second part argues that by internationalizing into markets with stronger investor protection, firm insiders “bond” themselves to a better governance system, which—according to the theory's first part—increases long-run q ( Stulz, 1999; Coffee, 2002; Benos and Weisbach, 2004). While the bonding view predicts that q will be higher in the long run, the dynamics might be complex. If there is bonding and the market anticipates the internationalization decision, then q may rise before the firm actually internationalizes. If the firm expands after internationalizing, q falls, though its new steady-state level should be higher than its pre-internationalization level. Thus, testing the predictions of bonding theories requires a long time series, as we compile in this paper, to trace the dynamics of q before and after internationalization. There is a growing empirical debate about the bonding view. Doidge (2004) finds that cross-listed firms have lower voting premia, which is consistent with the bonding hypothesis. Reese and Weisbach (2002) also argue that firms from countries with high shareholder protection list in the U.S. to raise capital, while those from countries with weak shareholder protection list in the U.S. to bond themselves to a better corporate governance mechanism. Others disagree. Licht (2003) and Pinegar and Ravichandran (2003) argue that internationalization does not effectively bond firms to improved governance standards. Siegel (2004) finds that cross-listing in the U.S. did not deter Mexican firm insiders from expropriating corporate resources. Our work is most closely related to Doidge, Karolyi, and Stulz (2004). They examine a cross-section of firms and find that firms cross-listed in the U.S. have higher qs than domestic firms, which they interpret as supporting the bonding view. We contribute to the debate over the bonding view by conducting a natural test of its predictions: we examine the evolution of q. 3 Although both segmentation and bonding theories predict that internationalization lowers the cost of capital and facilitates firm expansion, the two theories generally make conflicting predictions about the long-run relation between internationalization and q. Furthermore, by adding the time-series dimension, we alleviate some endogeneity concerns that complicate pure cross-sectional analyses of q. In particular, firms with higher qs might internationalize more frequently than those with lower qs. Thus, observing that international firms have higher qs than domestic ones does not necessarily imply that internationalization boosts q. We tackle this problem by analyzing the time-series patterns of the qs of international firms and comparing them to those of domestic firms. Our results challenge models predicting that internationalization bonds firms to a better governance system. Internationalization produces neither an enduring increase in q nor an increase in the qs of international firms relative to domestic ones. Moreover, since bonding models predict that internationalization induces a lasting increase in q only when firms bond themselves to a better corporate governance system, we examine (i) a subsample of firms from weak investor protection systems that internationalize into countries with stronger governance systems and (ii) subsamples of firms that internationalize in ways that are more likely to induce bonding, such as public cross-listings and listings on U.S. public exchanges. The results, however, do not change across different subsamples, further challenging the bonding view. Third, this paper's findings also relate to research on market timing. Firms could list abroad to exploit a temporarily “hot” market. Henderson, Jegadeesh, and Weisbach (2006) find that firms raise capital in the U.S. and the U.K. in “boom” markets, before returns fall. Foerster and Karolyi (1999) and Errunza and Miller (2000), however, do not find evidence of post-listing underperformance by capital-raising firms, as the market-timing hypothesis predicts. Consistent with market timing, we find that q rises before internationalization and then falls immediately afterwards. However, when we control for market sentiment by including price-earnings ratios, U.S. stock returns, local stock returns, the global industry q of each firm, and international capital flows, this does not alter the time-series pattern of q. Furthermore, firms keep expanding many years after they internationalize, which suggests that they are not simply exploiting a short-term boom in the market. Taken together, these results suggest that market timing is not the only force underlying internationalization. Finally, our work also relates to a broader literature on the general impact of financial integration on economic growth, national investment, and financial development.4 We do not examine these aggregate issues. Rather, we focus on the cross-firm implications of access to international equity markets by comparing international and domestic firms. The remainder of the paper is organized as follows. Section 2 describes the data. 3 and 4 present the results. We conclude in Section 5.

By documenting the time-series patterns of q and its components for firms that internationalize and then comparing those patterns to firms that do not internationalize, this paper provides a natural test of theoretical predictions concerning the causes and consequences of internationalization and presents information on the cross-distributional effects of internationalization. There are four key findings. First, international firms tend to have higher qs than domestic firms; that is, the average q of firms that internationalize at some point in the sample period is higher than the q of firms that never internationalize. Second, corporations do not experience an enduring increase in q after they internationalize. Tobin's q is not higher after internationalization and the qs of firms that internationalize do not increase relative to those of domestic firms (i.e., relative q does not increase after internationalization). Third, in terms of the dynamics, q rises before internationalization, peaks in the internationalization year, and then falls rapidly following internationalization. One year after internationalization, the q of international firms is lower than it is one year before they internationalize. Furthermore, the relative q of international firms follows the same pattern: rising before internationalization and during the internationalization year, but quickly relinquishing these increases after internationalization. Finally, a firm's market capitalization tends to rise prior to internationalization and remains high thereafter, while the firm's assets increase during internationalization. Furthermore, firms that internationalize expand relative to domestic firms. The results provide new evidence on different theories of internationalization. Several models predict that internationalization provides a vehicle for firms to bond themselves to a more effective corporate governance regime that reduces the diversion of corporate resources for private gain. The reduction in diversion, in turn, should boost Tobin's q. Out findings pose a challenge to these models. We find that q and relative q rise immediately prior to internationalization and then fall very quickly after internationalization back to their pre-internationalization levels. To the extent that bonding effects are present, other factors must also play an important role in the evolution of q. From a policy perspective, the finding that it might be difficult for firms to bond themselves to a better corporate governance framework by internationalizing reinforces the interest in how domestic laws and regulations can enhance corporate governance and boost economic efficiency. Second, the evidence is consistent with market segmentation theories, which hold that internationalization boosts firm size but exerts only a fleeting impact on q. 11 We find that internationalization is associated with a permanent increase in market capitalization, a temporary increase in q, and a subsequent jump in corporate assets. Future research could investigate the causes and consequences of the expansion of firms that internationalize relative to those that do not. Third, market timing theories might also explain some of the documented patterns. Firms could respond to positive shocks to the expected price of their shares abroad by raising capital or cross-listing in international markets. Since the increase in market value before internationalization is also consistent with markets anticipating that the firm is going to enjoy positive future benefits from internationalization (due to a reduction in segmentation, bonding, or any other cause), it is difficult to distinguish market timing from other theories of internationalization. Towards this end, we attempt to control for market timing by conditioning on stock market returns in the U.S. and the domestic market, price-earnings ratios, and global industry q values, among other country, industry, and firm traits. Our results are robust to including these factors. These findings do not rule out overvaluation or market timing. Rather, to the extent that we have appropriately controlled for market-timing effects, these findings imply that market timing is not the only force underlying the evolution of q and its components.