Working Paper: NBER ID: w27022
Authors: Craig Doidge; G Andrew Karolyi; Ren M Stulz
Abstract: In the 2000s, US firms have higher valuations than comparable non-US firms listed only outside the US but not non-US firms cross-listed in the US. Though one would expect this US valuation premium to fall over time because of globalization, it widens for firms in developed markets by 36% and falls for firms in emerging markets by 20% after the global financial crisis of 2007-2008. This evolution is explained in part by the decreased valuation of brown firms in other developed countries relative to the US. Other potential explanations are explored and rejected.
Keywords: US premium; globalization; climate change; valuation; Tobin's Q
JEL Codes: F21; F65; G10; G15; G34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| US Premium (before GFC) vs US Premium (after GFC) (N22) | US Premium (L87) |
| Financial Globalization (F65) | US Premium (L87) |
| Post-Financial Crisis Retreat from Globalization (F69) | US Premium (L87) |
| GDP Growth (O49) | US Premium (L87) |
| Operating Income (L29) | US Premium (L87) |
| Leverage (G32) | US Premium (L87) |
| US Premium for Developed Markets (G19) | US Premium (L87) |
| US Premium for Emerging Markets (F29) | US Premium (L87) |
| Cross-Listing of Non-US Firms (G15) | US Premium (L87) |
| Valuation of Brown Firms in Developed Markets (G19) | US Premium (L87) |
| Climate Change Risks and ESG Considerations (Q54) | US Premium (L87) |
| Differences in Attitudes Towards Sustainability (Q01) | US Premium for Emerging Markets (F29) |