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Article: Corporate valuation around the world: The effects of governance, growth, and openness

TitleCorporate valuation around the world: The effects of governance, growth, and openness
Authors
KeywordsCorporate governance
Corporate valuation
Economic openness
Growth options
Tobin's q
Issue Date2007
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jbf
Citation
Journal Of Banking And Finance, 2007, v. 31 n. 1, p. 35-56 How to Cite?
AbstractThe purpose of this paper is to provide a comprehensive analysis of corporate valuation around the world. Specifically, we (i) document and compare corporate valuation around the world, and (ii) identify the key factors that drive cross-country differences in valuation. In doing so, we utilize the country-level Tobin's q (CTQ), computed as the ratio of the aggregate market value to book value of all assets held by all public firms domiciled in a country, which amounts to the Tobin's q for the 'market portfolio' of the country. The key findings of the paper are: First, CTQ varies greatly across countries, ranging from 0.73 for Venezuela to 2.11 for Finland, with the international mean of 1.30 during our sample period 1999-2004. Despite the steady integration of the world economy in recent years, corporate valuation remains starkly different across countries. Second, apart from the effect of corporate governance, cross-country differences in corporate valuation are significantly driven by the growth options of countries represented by the R&D intensities, capital expenditures, and GDP growth. In addition, the degree of capital market openness has a significant, independent effect on valuation. Third, our regression analyses show that CTQ varies directly with shareholder rights, enforcement of insider trading laws, GDP growth, R&D intensity, and the degree of capital market openness. The key findings remain robust to the inclusion of inflation and industry effects. © 2006 Elsevier B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/157719
ISSN
2015 Impact Factor: 1.485
2015 SCImago Journal Rankings: 1.264
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChua, CTen_HK
dc.contributor.authorEun, CSen_HK
dc.contributor.authorLai, Sen_HK
dc.date.accessioned2012-08-08T08:54:53Z-
dc.date.available2012-08-08T08:54:53Z-
dc.date.issued2007en_HK
dc.identifier.citationJournal Of Banking And Finance, 2007, v. 31 n. 1, p. 35-56en_HK
dc.identifier.issn0378-4266en_HK
dc.identifier.urihttp://hdl.handle.net/10722/157719-
dc.description.abstractThe purpose of this paper is to provide a comprehensive analysis of corporate valuation around the world. Specifically, we (i) document and compare corporate valuation around the world, and (ii) identify the key factors that drive cross-country differences in valuation. In doing so, we utilize the country-level Tobin's q (CTQ), computed as the ratio of the aggregate market value to book value of all assets held by all public firms domiciled in a country, which amounts to the Tobin's q for the 'market portfolio' of the country. The key findings of the paper are: First, CTQ varies greatly across countries, ranging from 0.73 for Venezuela to 2.11 for Finland, with the international mean of 1.30 during our sample period 1999-2004. Despite the steady integration of the world economy in recent years, corporate valuation remains starkly different across countries. Second, apart from the effect of corporate governance, cross-country differences in corporate valuation are significantly driven by the growth options of countries represented by the R&D intensities, capital expenditures, and GDP growth. In addition, the degree of capital market openness has a significant, independent effect on valuation. Third, our regression analyses show that CTQ varies directly with shareholder rights, enforcement of insider trading laws, GDP growth, R&D intensity, and the degree of capital market openness. The key findings remain robust to the inclusion of inflation and industry effects. © 2006 Elsevier B.V. All rights reserved.en_HK
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jbfen_HK
dc.relation.ispartofJournal of Banking and Financeen_HK
dc.subjectCorporate governanceen_HK
dc.subjectCorporate valuationen_HK
dc.subjectEconomic opennessen_HK
dc.subjectGrowth optionsen_HK
dc.subjectTobin's qen_HK
dc.titleCorporate valuation around the world: The effects of governance, growth, and opennessen_HK
dc.typeArticleen_HK
dc.identifier.emailLai, S: sandy_lai@hku.hken_HK
dc.identifier.authorityLai, S=rp01620en_HK
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1016/j.jbankfin.2006.02.002en_HK
dc.identifier.scopuseid_2-s2.0-33845305758en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-33845305758&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume31en_HK
dc.identifier.issue1en_HK
dc.identifier.spage35en_HK
dc.identifier.epage56en_HK
dc.identifier.isiWOS:000243620900004-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridChua, CT=11840003100en_HK
dc.identifier.scopusauthoridEun, CS=7004074630en_HK
dc.identifier.scopusauthoridLai, S=15127185200en_HK

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