MURAL - Maynooth University Research Archive Library



    Investability and Firm Value. Department of Economics, Finance & Accounting Working paper series N192/05/08


    O'Connor, Thomas G. and Mitton, Todd (2008) Investability and Firm Value. Department of Economics, Finance & Accounting Working paper series N192/05/08. National University of Ireland Maynooth. (Unpublished)

    [img] Download (275kB)


    Share your research

    Twitter Facebook LinkedIn GooglePlus Email more...



    Add this article to your Mendeley library


    Abstract

    We study how investability, or openness to foreign equity investors, affects firm value in a sample of over 1,400 firms from 26 emerging markets. We find that, on average, investability is associated with a 9% valuation premium (as measured by Tobins q). However, in firm-fixed effects regressions this valuation premium disappears, suggesting that investability does not have a causal effect on firm value. Analysis of the components of Tobins q shows that firms that become investable experience significant increases in both market values and physical investment. These effects are strongest for firms that face country-level or firm-level financial constraints prior to becoming investable.

    Item Type: Other
    Keywords: Financial liberalization; Investability; Foreign investors; Tobins q;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 1008
    Depositing User: Ms Sandra Doherty
    Date Deposited: 20 May 2008
    Publisher: National University of Ireland Maynooth
    Refereed: No
    URI:
    Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

    Repository Staff Only(login required)

    View Item Item control page

    Downloads

    Downloads per month over past year

    Origin of downloads