Market segmentation and equity valuation: Comparing Canada and the United States
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.
Year of publication: |
2008
|
---|---|
Authors: | King, Michael R. ; Segal, Dan |
Published in: |
Journal of International Financial Markets, Institutions and Money. - Elsevier, ISSN 1042-4431. - Vol. 18.2008, 3, p. 245-258
|
Publisher: |
Elsevier |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
The long-term effects of cross-listing, investor recognition, and ownership structure on valuation
King, Michael R., (2009)
-
Market segmentation and equity valuation : comparing Canada and the United States
King, Michael R., (2008)
-
The long-term effects of cross-listing, investor recognition, and ownership structure on valuation
King, Michael R., (2006)
- More ...