The valuation effects of overseas listings: the case of the Tokyo stock exchange

Abstract

Shareholders of U.S. firms that listed stocks on the Tokyo Stock Exchange through 1988 are shown to have experienced significant wealth gains. These findings are in sharp contrast with previously reported losses due to foreign listings. The wealth effects of the Tokyo listings depend upon other aspects of the firms' international involvement. The largest gains accrue to firms that do not have a business presence in Japan at the time of listing and for which the Tokyo listing in its first foreign one. The results are consistent with advantages inherent in a multinational business network and diminishing returns to foreign listings.