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The aim of this research is the investigation of strategic behavior of Chinese investors in Japan when making cross-border acquisitions in recent times. While previous literature on acquisitions tended to show that Chinese acquirers were merely resource-driven, i.e. their main purpose was to acquire products, brands, and knowledge to be transferred back to the (Chinese) home market, our study suggests that the behavior of many Chinese firms has changed lately. In a pivotal study with 39 Chinese bidders taking over Japanese targets, we find that their strategy has become increasingly market-driven instead. As far as industry-wise acquisitions are concerned, Chinese firms are taking over Japanese hotels and recreation facilities in recent years for the purpose of providing services to Chinese tourists.

We investigate how group- and market-specific traits impact the credit policy of foreign-owned banks operating in Central, Eastern and South-Eastern European (CESEE) countries over the 1995–2015 pe...

This paper aims to analyse the association of the adoption of proactive CSR practices with internal and external institutional pressures on a group of emerging market MNCs. CSR proactivity is measured by the adoption of green and social certifications through the value chain. CSR is understood by all means as a component of the legitimating strategy of Brazilian subsidiaries to gain competitiveness abroad. Data from primary and secondary sources is analysed by the multiple linear regression technique. Results reveal that CSR proactivity is associated with green and social certifications. Also, companies’ commitment to ethics at their headquarters is reflected by their CSR subsidiaries abroad. Yet, the adoption of green certifications do not make up for the less developed institutional environment found on the home market for companies on their operations abroad.

We examine the asynchronous price movements of the same assets traded on multiple markets, each of which has its unique characteristics. Differently from the existing literature, we use a dynamic structural Vector Autoregressive (VAR) setting to explore the effects of market-wide and idiosyncratic shocks on both home and host listings. We find strong evidence that foreign prices lead home prices, but not the reverse effect. Contrary to theory predictions, investors in the firms’ home market respond to idiosyncratic fluctuations in the stock returns in the host markets. Our results suggest that investors pay attention to fluctuations in the stocks listed on the more institutionally developed markets.

This paper reassesses the home market effect in the light of firm-level heterogeneity. Industries with high barriers to trade, less differentiated products and high productivity dispersion are more likely to concentrate in larger markets. These results differ partly from the predictions of models without selection into exporting. In the presence of economies of scale firms tend to locate in markets where export selection is less competitive. These predictions are confirmed in an empirical investigation based on 34 OECD countries and 118 sectors.

This article investigates the impact of trade liberalization on trade patterns, firm markups, and firm locations in a two-factor monopolistic competition model that features variable elasticity of substitution by a general additively separable utility. We find that, depending on the relative export hurdles, either direction of one-way trade may occur when trade opens up. Its direction determines the responses of firm-level markups and various home market effects to falling trade costs. Our results show that some important findings in the literature are robust only with particular classes of preferences. We provide a possible rationale for some well-known conflicting empirical facts.

We analyze institutional ownership in listed ADRs over the last two decades and investigate new determinants of institutional ownership in these ADRs. Using a unique dataset, we find that institutional investors invest more in ADRs without underlying stocks listed in the home market (i.e., single ADRs). We also document that institutional investors invest less in ADRs whose underlying stocks attract more foreign investors, and invest more in ADRs with more concentrated institutional ownership structure. Our results are statistically and economically meaningful and are robust to a battery of sensitivity checks.

We study the quantity of ESG disclosure of 1,963 large-cap companies headquartered in 49 countries. Using the Bloomberg ESG disclosure score as the measure of disclosure quantity, we find that firm characteristics explain most of the variation in firms' ESG disclosure, whereas variations in country factors such as corruption and political rights explain less. We empirically examine and extend the theoretical framework of the liability of foreignness in capital markets. Our results support the notion that cross-listed firms disclose more ESG data than those only listed in their home market to mitigate the liability of foreignness in external capital markets. We also find that an increased percentage of foreign ownership does not augment ESG disclosure. Companies which opt to increase foreign equity ownership at home do not encounter the challenges of foreignness. Our findings suggest that cross-listed status is likely to reduce the importance of country factors for variations in ESG disclosure quantity.

We explore the role of trade costs for the home bias in trade. In a series of Cournot duopoly experiments with a home and an export market, we compare output choices when firms face different levels of trade costs. We find that there is two-way trade in identical products and that firms hold the majority market share in their home market. The resulting home bias turns out to be, however, stronger than that predicted by theory, and it even occurs without trade costs. Tacit collusion contributes to the home bias observed in our experiment but does not offer a full explanation for the phenomenon.

Despite increased interest in nontraditional marketing activities such as sponsorship, the ability of brand marketers to quantify the return on investment from such approaches is a continued challenge. Given their proprietary nature, investigations of sponsorship costs are particularly sparse. Therefore, this study utilizes a dataset of more than 700 sponsorships undertaken by competitors in the financial services industry to investigate the influence of a variety of factors on costs. Results indicate that costs are not simply reflective of firm size, and costs of title and naming rights sponsorships are significantly higher. Evidence of agency conflicts are found in increased costs for sponsorships of events, organizations, and venues residing within the marketers’ home market. Sponsorships of sport organizations are significantly more costly than those of arts, entertainment, and nonprofit organizations, presenting a challenge for marketers seeking to engage today’s consumer via sport sponsorships in an increasingly competitive environment.

We investigate liquidity, transaction costs and information content in trades of mainland Chinese stocks that are cross-listed on the Hong Kong stock market. Most majority of cross-listed Chinese stocks issue shares in the Hong Kong market and domestic shares at the same time, or even issue the former prior to the issuance of the latter. We find supportive evidence of the bonding hypothesis. Cross-listed stocks are more liquid, have lower transaction costs and less information content in trades than those non-cross-listed. These improvements remain significant after controlling for known liquidity determinants.

Using a sample of firms from 40 countries cross-listed in the U.S. during the 1982–2018 period, we find that the discrepancy between a firm's home industry valuation and its corresponding U.S. industry valuation—the relative industry valuation—is an important factor in the listing decision and valuation after listing. International firms whose home market industries are undervalued relative to the corresponding U.S. industries are more likely to cross-list. They also enjoy permanent valuation gains after listing. These firms issue more equity, invest more, and realize higher growth rates.

We study multimarket effects in a setting with home-market asymmetries. In our duopoly experiment each firm has a home market but may also enter the other firm's market. Without entry barriers, we observe a high level of mutual forbearance with firms serving home markets exclusively. With short-term entry barriers, the competition rates decrease significantly. Surprisingly, with long-term entry barriers, firms exhibit higher levels of competition, entering each other's market more often. We conjecture that in the latter case, bearing the cost of entryis perceived as a signal for intentions to compete, which has an adverse effect on cooperation.

Organic agri-food products in Spain face major commercial prob- lems in the home market as a result of consumers’lack of informa- tion about this type of product and difficulties in accessing it, and the considerable price differential between organic products and their conventional equivalents. This study proposes that consider- ation should be given to social media as a factor for mitigating these commercial problems and improving the competitiveness of organic food companies. Specifically, the aim of this research was to examine the social media penetration and activity of olive oil sector companies and ascertain whether organic and non-organic operators present differences in this respect. To this end, a checklist was used to analyse the social media activity of 663 olive oil com- panies in total, comprising both organic and non-organic pro- ducers. The results reveal statistically significant differences in social media penetration and use by organic and non-organic operators, with the former being more active in these networks. Nevertheless, the social media efforts of organic operators are less effective, owing to the limited demand for their products.

This study investigates the relationship between home market performance and the choice of foreign market entry mode using survey data and financial statement data for German insurance groups with property–liability business from 1999 to 2011. We develop a dynamic resource-based perspective and argue that strategic transformation is a major motive driving the decisions of insurance groups to internationalize their businesses. Additionally, the more rapid the strategic transformation, the more intense is the choice of market entry mode. Furthermore, our findings corroborate the notion that internationalization has a positive effect on home market performance when insurance groups are able to decrease home market dependence by extending the degree of internationalization.

This study uses minute-by-minute data to analyze price discovery dynamics between the Nikkei 225 index in Japan and the E-mini S&P 500 index futures in the United States across their respective time zones. Specifically, we apply Gonzalo and Granger's (1995) and Hasbrouck's (1995) models to examine long-term price discovery in the markets and use a Granger-causality test to analyze the short-run dynamics of information transmission. We find a consistent result in the short- and long-run price discovery process. Our results show that the Nikkei 225 index futures price is influenced mainly by information from the location of trading rather than from the home market, supporting the trading-place-bias hypothesis. We also find that the leading role in information transmission has changed over time, from the United States in 2011–2012 to Japan in 2013.

This paper documents the global trading volume distribution of cross-listed stocks and examines factors that make a host market competitive in attracting order flows between host and home markets. We hand-collect a sample of 642 cross-listed firms in 10 host countries with 771 cross-listings from 39 home countries between 1981 and 2010. We document that, for the first time, whether a host market shares the language or legal origin with the home markets has significant impact on attracting order flows. We also find that host markets are more successful in attracting trading volume when they have a higher information factor, have lower bid-ask spreads, provide better investor protection and information disclosure, and are closer to the home market. Additionally, small but mature high-tech firms with high growth rate, volatile stock returns and high foreign sales are prone to execute more trading in host markets.

We characterize mixed-strategy equilibria when capacity-constrained suppliers can charge location-based prices to different customers. We establish an equilibrium with prices that weakly increase in the costs of supplying a customer. Despite prices above costs and excess capacities, each supplier exclusively serves its home market in equilibrium. Competition yields volatile market shares and an inefficient allocation of customers to firms. Even ex-post cross-supplies may restore efficiency only partly. We show that consumers may benefit from price discrimination whereas the firms make the same profits as with uniform pricing. We use our findings to discuss recent competition policy cases and provide hints for a more refined coordinated-effects analysis.

We investigate the inter-market return and volatility linkages for an atypical case of firms with foreign IPOs that subsequently cross-listed in their domestic market. In particular, our data set consists of a unique sample of 29 Israeli firms that went public in the US (host market) and then cross-listed in the Israeli market (home market). To estimate the spillover effects, we employ bivariate GARCH models, assuming both constant and dynamic conditional correlation specifications. At the aggregate market level, we find unidirectional mean and volatility spillovers from the US to the Israeli market. For the portfolios of Israeli cross-listed stocks, we report significant spillovers, at both the mean and volatility levels, from the underlying stocks in the Israeli market to their American Depository Receipts (ADRs) but not vice versa. Thus, the home market dominates the host market in the price discovery process in this atypical international cross-listing case, providing new evidence in support of the home bias hypothesis. We also find that external shocks originating from the Middle East peace process have no impact on the conditional correlation between the two markets but external shocks originating from the world and regional markets impact the conditional correlation positively.

This study provides a comprehensive examination of price discovery for American Depositary Receipts (ADRs) originating in Latin America. Using data on 87 ADR issues from Latin America, the empirical approach allows for an endogenous role of exchange rate fluctuations in the price discovery process. The results indicate that while exchange rates are not primarily determined by stock market prices, there is significant flow of information from the stock market to currency markets particularly in Brazil and Mexico. In addition, the results reveal a mix of price discovery locations across Latin America. The conventional finding that the home market matters most for price discovery holds only for Chile. For ADRs from Brazil, the home and U.S. markets contribute equally to price discovery while the U.S. market dominates in price discovery for ADRs from Argentina and Mexico. Results from a cross-sectional analysis indicate that higher levels of illiquidity at home are consistent with higher contributions to price discovery from the U.S. market.

We characterize legality and incidence of short selling in a worldwide, multimarket framework. Home country short selling restrictions curtail home market stock borrowing by 45% and reduce short selling of the country's American Depository Receipts (ADRs) by 68% due to regulatory reach. Also, the 2008 US ban on short selling of financial firms reduced borrowing in foreign locations. These findings are robust to controls for option availability, enforcement, returns, firm size, trading volume, dividends, ADR level, volatility, days-to-cover, and industry sector. Further, we show that investor conduct resulting from adherence to professional standards is a more powerful mechanism of regulatory reach than intergovernment cooperation.

In this paper we propose an innovative measure for information flows between stock exchanges. We develop an intensity-based information share using Russell’s (1999) autoregressive conditional intensity model. Thereby we maintain the irregular nature of financial high frequency data and use durations and timing of price changes to determine the informationally dominant market. From our empirical application to US-listed Canadian stocks we conclude that the home market mostly reflects information first. On the basis of a cross-sectional analysis we find a positive correlation between the intensity-based information share and liquidity.

We develop a two-country model with heterogeneous producers and rent-sharing at the firm level. We identify two sources of a multinational wage premium: A composition effect because multinational firms are more productive, make higher profits, and pay higher wages, and a firm-level wage effect, because a firm makes higher global profits and thus pays higher wages in its home market when becoming multinational. With two identical countries, the wage premium is fully explained by firm characteristics. Allowing for technology differences between countries, a residual wage premium exists in the technologically backward country but not in the advanced country.

We examine time dependency in the factors motivating delistings of foreign firms from major U.S. Exchanges over the period 1962–2006. For firms listing before Sarbanes-Oxley (SOX), we find that governance has no significant effect on delisting but after SOX, it becomes one of the main forces driving delisting. For firms whose delisting decision is most likely attributable to SOX, we find they realize low benefits from listing – they originate from countries with strong home market governance, and from listing onward realize low trading volume, analyst coverage, and make little use of capital raising. Our results suggest that SOX has had a large influence on the benefits seek from a U.S. listing, leading firms from well governed countries and low capital raising needs to delist.

Are the returns of Chinese ADRs more affected by the U.S. stock market or their underlying home market? Since there is non-synchronous trading between U.S. and the Chinese stock markets, we decompose the Chinese ADR daily returns into day and night returns to investigate the different market factors in Chinese ADR pricing. This paper also attempts to separate "homeless" ADRs from home-based ADRs to see if they are affected differently by market factors. We include a sample of 76 Chinese ADRs with the daily data from January 2000 to July 2010. Through regression and VAR analysis, we find that the U.S. market dominate the day returns of Chinese ADRs, and the Hong Kong market factor dominate the ADR night returns over the mainland China market for the whole sample. These results are particularly strong for “homeless” ADRs.

This paper investigates the optimal reform of introducing decoupled payments in the agrofood sector. The model captures the vertical structure of the sector where the domestic processors exert potential oligopsony power towards farmers and compete with foreign firms in the home market. The results suggest that the government may face a potential trade-off of introducing decoupled payment, while committing to the restriction of trade barriers. The presence of imperfect competition makes it more likely for the government to keep a high level of trade barriers and production subsidy after the introduction of decoupled payment. , Oxford University Press.

Most existing studies examine the home market effect (HME) in a framework with immobile labour as the only production factor and the assumption of a freely traded homogeneous good is known to be crucial for the HME to emerge. This study explores the HME in the presence of mobile capital by use of a footloose capital model allowing for positive transport costs of the homogeneous good. The mobile capital generates a channel to offset the trade imbalance of a country. As a result, the HME always appears for arbitrary transport costs in both sectors of differentiated and homogeneous goods. La plup art des travaux existants etudient l’effet du marche domestique dans un cadre d’analyse ou le travail immobile est le seul facteur de production et ou le postulat d’un bien homogene librement echange est considere comme un element crucial pour que l’effet du marche domestique emerge. Ce texte explore le phenomene dans le cas ou le capital est mobile et ou on utilise un modele de capital libre comme l’air avec couts de transport positifs pour le bien homogene. Le capital mobile engendre un canal pour compenser le desequilibre commercial d’un pays. En consequence, l’effet du pays domestique apparait toujours pour des couts de transport arbitraires dans les secteurs des biens differencies ou homogenes.

We consider bidders who are simultaneously participating in private value second-price sealed bid auctions in multiple markets. While active in each market, each bidder is associated with a unique home market in which it can potentially serve as a ring center. Pairs of bidders can establish bilateral agreements to be members of bidding rings in each others’ home markets. Rings can be weak or strong depending respectively on whether side payments are permitted or not. Weak multimarket rings have been shown to take the form of exclusive groups of completely connected bidders. We consider strong multimarket bidding rings and show that they assume a radically different architecture of dominant groups, stars, and interlinked stars. Since bidding rings are tacit, and therefore unobservable, we develop observable implications of multimarket rings that can detect the existence of collusion as well as its form (i.e., weak or strong).

This paper examines critically the role of the law of the tendency of the falling rate of profit in the geographic expansion (globalization) of competitive capitalism. It contends that Marx did not believe there was an iron-clad connection between the falling rate of profit and globalization; in addition, it argues that Marx believed that the capitalists’ insatiable search for colonial markets was driven by their desire to overcome recurrent (and growing) realization problems in the home market arising from deficient aggregate demand on the part of both workers and capitalists. (This abstract was borrowed from another version of this item.)

We examine the effect of home market short-sale constraints on securities that also trade in other countries that have more liberal short-sale rules. In particular, we focus on the case of ADRs traded in the US, as in some cases, the home markets of these ADRs prohibit short selling. We find that short sellers more heavily trade ADRs from countries where short selling is prohibited than from markets where short selling is allowed. Furthermore, we find that the greater levels of short selling in ADRs with binding home-market constraints is driven by stocks with greater dispersion of investors’ opinion, low fundamentals-to-price ratios, and recent price increases. Our results support the hypothesis that short sellers target ADRs with home market short-sale constraints because these ADRs are more often subject to temporary misvaluation.

In this paper we examine the optimal privatization and trade policies in a mixed oligopoly in which a domestic semipublic firm competes against domestic and foreign private firms in a home market. Specifically, we consider two strategic trade instruments: a domestic production subsidy and an import tariff, with partial privatization. The result shows that the privatization strategy is affected strongly by trade instruments. Moreover, the choice of trade instruments lies upon the relative number of domestic and foreign private firms.

In this paper we consider a simple duopoly market in which a home firm and a foreign firm use labor to produce an identical product and supply it to the home market. Firms emit pollution as a by-product of production. We show conditions under which international trade liberalization decreases (increases) the global pollution.

We model and estimate ADRs’ home market pass-through and pricing-to-market using a regime-switching approach, which nests the two regimes in a conditional capital asset pricing model and treats any changes in these two regimes probabilistically. Our results from the 1998 to 2006 data show that the pricing-to-market regime dominates ADRs from China and Japan, whereas the home market pass-through regime dominates ADRs from Argentina and Germany when their respective home markets are volatile.

This study examines the factors that determine differences in efficiency of foreign banks in the host market (Australia). The impact of home market, host market and parent bank characteristics are considered within the frameworks offered by comparative advantage and new trade theories. Parametric distance functions are used to estimate the efficiency of foreign banks in Australia, and the robustness of model specification is tested using both general-to-specific modelling and extreme bounds analysis. It is found that following clients reduces the efficiency of profit creation. Incumbent bank's market share acts as a barrier to entry, while parent bank profits do not improve host nation efficiency. The limited global advantage hypothesis was found to be relevant for banks from the United Kingdom, while banks from the United States were generally less efficient.

We suggest a new parametric approach to estimate the extent of downward nominal wage rigidity in ten European countries between 1995 and 2001. The database used throughout is the User Data Base of the European Community Household Panel (ECHP). The proposed approach is based on the generalized hyperbolic distribution, which allows to model wage change distributions characterized by thick tales, skewness and leptokurtosis. Significant downward nominal wage rigidity is found in all countries under analysis, but the extent varies considerably across countries. Yearly estimates reveal increasing rigidity in Italy, Greece and Portugal, while rigidity is declining in Denmark and Belgium. The results imply that the costs of price stability differ substantially across Europe.

This paper studies the dynamics of price discovery for markets with bilateral cross-listings. Using a sample of four Australian stocks cross-listed in New Zealand and five New Zealand stocks cross-listed in Australia for the period January 2002 to December 2007, we assess Hasbrouck (1995) information shares and Grammig et al. (2005) conditional information shares over time. We observe that in both cases the home market is dominant in terms of price discovery. However, when studying price discovery over time, we find that the importance of the Australian market (the larger of the two markets) is increasing for both Australian and New Zealand domiciled firms. Finally, using panel regression analysis, we find that the growth in the importance of the Australian market is positively related to the growth in the size of the firm and negatively related to the size of the percentage spread in the Australian market, implying that as firms grow larger and their cost of trading in Australia declines, the Australian market becomes more informative.

Using a large sample of cross-border mergers we measure the effect of a change in location on systematic risk. We document a large, widespread, and robust effect. When a target firm's location moves as a result of an international merger, a large part of its systematic risk switches from being related to its home equity market to that of the acquirer. On average the beta of the pooled target and acquirer with respect to the acquirer market increases by 0.155 and the beta with respect to the target market declines by 0.117. This is equivalent to an excess shift of about 0.5 in the target's beta from its home market to that of the acquirer. We test whether the change in systematic risk can be explained by fundamental factors related to changes in the operations of the firm or merger synergy and find that it cannot.

A great divide exists between equity investors in developed market countries—the North—and investors in emerging market countries—the South—in their perspectives on global diversification. The investment policies of North investors typically are overweight allocations to the home market and underweight allocations to the emerging markets relative to the average global investor who has a home-market and developed-market bias. In contrast, the investment policies of South investors typically are overweight allocations to the home market and to other emerging markets, thus having a home-market and emerging-market bias. Relative to a fully global portfolio, both North and South portfolios are at risk of underperforming the average global investor, with some investors falling behind their current relative-wealth positions. Dopfel explores is the potential downside of North and South portfolios and the investors that are more likely to outperform the average global investor over the long run.

This article tries to answer the question: is the response of current returns to past returns asymmetric when the returns follow an autoregressive, spillover GARCH model? Our empirical findings are consistent with the following notions. First, both US and UK markets appear to overreact to the drastic events in the 1990s. Second, the impacts of the 1-week-ahead foreign market returns were marked during the 1980s, especially when the home market returns were both volatile and negative. In contrast, the impacts were insignificant during the 1990s. Third, in the 1990s, the UK (US) investors' behaviour during the bust appears to be consistent (inconsistent) with the leverage effects.

This paper examines the differential between the share prices of Chinese securities traded on their home market of Shanghai versus prices observed offshore in New York and Hong Kong. The discounts attached to Chinese securities, whether trading as ADRs on the NYSE or as H-shares on the Hong Kong market, appear to have been significantly influenced by changes in both exchange rate expectations and investor sentiment during 1998–2006. Expected exchange rate changes alone account for approximately 40% of the total variation in each case. This is combined with large cross-sectional variation, however, reflecting additional significant market-wide and company-specific sentiment effects.

This study investigates audience acceptance of foreign movies in an import-dominated exhibition market—Singapore. The characteristics of home cinema markets and the cultural distances of the film-exporting countries are operationalized in an empirical model to explain the highly varied demand in this import market for international films from various sources. We show that during 2002–2004 release frequencies and box-office performance for films originating in different countries are significantly accounted for by both economic and cultural factors. Films from countries with larger domestic markets and from countries culturally more similar to Singapore experience greater box-office success. Furthermore, an individual foreign film's Singapore box-office performance is explained by its box-office success in its home market and the intercountry cultural distance.

We use Granger causality tests and an EGARCH model to analyze the pricing relations in the US between two exchange traded funds, the iShares FTSE/Xinhua China 25 Index (FXI) and the S&P 500 Index Fund (IVV). Daily data indicates that Hong Kong home market basically drives the FXI returns in the US. In case of intraday analysis, the US-based IVV appears to dominate the pricing of the FXI. The evidence supports the speculative pricing hypothesis that the location of trading has stronger effects than the influence of domestic effects summarized by FXI's lagged returns.

This study compares two alternative approaches–the traditional ordinary least square (OLS) and the Poisson Quasi Maximum Likelihood (PQML) procedures–to estimation of the home market effects for the heterogeneous, the reference priced and the homogeneous goods in the gravity model derived in Feenstra et al. (2001). Despite our findings that the PQML estimation results oftentimes (significantly) differ from those obtained by the OLS procedure, both estimation procedures largely lead to the qualitatively similar conclusions on the existence of the home market effect for the different types of goods with several exceptions.

We investigate the spatial distribution and organization of an imperfectly competitive industry when firms may choose to operate more than a single production unit. Focusing on a short-run setting with a fixed mass of firms, we fully characterize the spatial equilibria analytically. Comparing the equilibrium and the first-best, we show that both organizational and spatial inefficiencies may arise. In particular, when fixed costs are low enough the market outcome may well lead to overinvestment and, therefore, to too many multinationals operating from a social point of view. Furthermore, once multinationals are taken into account, the market outcome may well lead too little agglomeration.

In this study, we apply a more refined statistical procedure to test the dependencies and direction of inter-day spillover effects between the ADRs and their underlying shares on two nonsynchronous international markets. The empirical results provide evidence of contemporaneous return and volatility spillovers from Tokyo to New York, and vice versa. In the lagged spillover test, the evidence also suggests that the dominant market (home market) adjusts to the information from the satellite market (foreign market) in an efficient manner. In contrast, the satellite market reacts to the information from the dominant market with a delay.

This article concludes that cooperative firms' choice of interfirm consolidation and collaboration strategies can be explained by two attributes, inherent in the cooperative business form, namely, risk aversion and equity capital constraints. Empirical data originate from the 15 largest EU dairy firms during a 5-year period (1998–2002). In total 198 activities are identified. They are classified into six categories: (a) mergers, (b) acquisitions, (c) strategic share holdings, (d) joint ventures, (e) licensing, and (f) general collaboration agreements. It is shown that cooperative firms prefer mergers, collaboration agreements, joint ventures, and licensing. All of these are relatively low in terms of both performance risks and relational risks, and they demand limited amounts of equity capital. Investor-owned firms focus on take-over strategies—acquisitions and share holdings. Other indicators of risk aversion are that cooperatives tend to collaborate with other cooperatives and that they prefer partners in their own home market. [EconLit: Q130; P130; L200.] © 2007 Wiley Periodicals, Inc. Agribusiness 23: 453–472, 2007.

This paper is concerned with the effect of enforced home bias on the development of emerging stock markets. It provides a detailed study of the impact on the Warsaw Stock Exchange of the Polish pension fund reforms and the associated restrictions on international investment. The time path of market development for the Warsaw Stock Exchange is compared with a benchmark sample consisting of the other seven post-communist countries that joined the EU in May 2004. It is shown that benefits arising from the pension funds’ increased investment in the home market are short-lived. In the long run, the relative performance of the Polish market returned to pre-1999 levels or worse, suggesting that enforced home bias on emerging markets may be detrimental, rather than beneficial, to the long-run development of the market.

We compare the issue costs of 299 companies from emerging and developed market countries making initial public offerings (IPOs) in the United States between 1991 and 2001. Our results indicate that IPOs from emerging markets experience the same costs on average as IPOs from developed market countries. Although there is a large gap between the country risk ratings of the emerging and developed market countries, IPO issuers from emerging markets appear to bridge that gap by being large issuers in their respective home countries, listing more frequently on the NYSE, and having a greater proportion of activity in manufacture and infrastructure segments, and a lower proportion in high-tech segments. These issues occur following periods of strong U.S. and home market equity performance which helps to alleviate country risk. In comparison to their developed market peers, emerging market issuers are a select group of higher-quality firms.

This paper documents changes in volatility, returns, liquidity and valuation on the local market following different ADR issues, viz., Level I, II, III, Rule 144A and Regulation S offerings, by the Indian firms in the global market. The sample consists of 84 ADR and GDR issues made by the Indian firms during 1990–2001. The Rule 144A and Reg S issues experience a significant decline in volatility on the home (Indian) market and these effects are mainly observed during the first sub-period, i.e. 1990–1997. In addition, Level III ADRS, which are exchange listed and capital raising issues, experience a significant increase in liquidity on the home market and these occur in the second sub-period, i.e. 1998–2001. Though ADRs in general experience an increase in valuation (as measured by the q ratios) after the U.S. issue, there is no strong evidence to suggest that the magnitude of increase depends on the method of entry.

Cross-country panel data are used to assess the effect of free-trade agreements on flows of Foreign Direct Investment (FDI). Free-trade agreements are found to have a significant positive effect on FDI flows, and free-trade agreements are found to matter more for the smaller members of the agreement. For example, the North American Free-Trade Agreement's (NAFTA) effect on FDI flows into Mexico is much larger than its effect on flows into the United States. These cross country results are used to assess NAFTA's effect on FDI flows into Mexico. After controlling for a set of other factors such as an increase in worldwide FDI flows the trade agreement is found to generate FDI flows nearly 60 percent higher than they would have been without the agreement.