International Financial Integration Through Equity Markets: Which Firms from Which Countries Go Global?

June 1, 2007

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Format: Chicago

Sergio L. Schmukler, and Stijn Claessens. International Financial Integration Through Equity Markets: Which Firms from Which Countries Go Global?, (USA: International Monetary Fund, 2007) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper studies international financial integration analyzing firms from various countries raising capital, trading equity, and/or cross-listing in major world stock markets. Using a large sample of 39,517 firms from 111 countries covering the period 1989-2000, we find that, although international financial integration increases substantially over this period, only relatively few countries and firms actively participate in international markets. Firms more likely to internationalize are from larger and more open economies, with higher income, better macroeconomic policies, and worse institutional environments. These firms tend to be larger, grow faster, and have higher returns and more foreign sales. While changes occur with internationalization, these firm attributes are present before internationalization takes place. The results suggest that international financial integration will likely remain constrained by country and firm characteristics.

Subject: Capital markets, Financial integration, International capital markets, Market capitalization, Stock markets

Keywords: Domestic firm, Firm characteristic, Firms active, Governance variable, International firm, Return on assets, WP

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/138
Stock No:

WPIEA2007138
ISBN:

9781451867022
ISSN:

1018-5941

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