Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
963298 | Journal of International Financial Markets, Institutions and Money | 2008 | 14 Pages |
Abstract
We confirm that Canadian and U.S. equity markets remain segmented and find no evidence that integration is increasing over time. We establish this result by comparing the valuation multiples assigned to the equity of Canadian firms listed exclusively in the home market with a matched sample of U.S. firms over the period 1989-2004. Canadian firms have lower valuations based on multiples of market-to-book, price-to-last 12-month earnings, Tobin's q, and enterprise value-to-EBITDA, despite exhibiting higher sales growth and profitability. Consistent with market segmentation, this Canadian discount is reduced when Canadian firms cross-list on a U.S. stock exchange.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Michael R. King, Dan Segal,