Details

Autor(en) / Beteiligte

• Baschieri, Giulia
• Carosi, Andrea
• Mengoli, Stefano

Titel

Local IPOs, local delistings, and the firm location premium

Ist Teil von

• Journal of banking & finance, 2015-04, Vol.53, p.67-83

Ort / Verlag

Amsterdam: Elsevier B.V

Erscheinungsjahr

2015

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• •A new measure for firm traits relating to location is introduced into the literature.•The relation between corporate market value and corporate location is investigated.•Corporate market value increases with firm isolation and local investor income.•Location premium decreases due to local IPOs, yet increases with local delistings.•Local home bias and local investor risk tolerance also affect IPO underpricing. Borrowing a measure from ecology, we introduce a spatial dispersion index to quantify the firm traits related to firm geographic location and investigate firm exposure to local home bias and local investor risk tolerance as determinants of corporate market value. Consistent with the investor preference for local stocks, we find listed firms benefit from a location premium that increases with firm isolation and local investor wealth. IPOs and delistings are found to affect the market value of neighboring listed firms: isolated firms decrease in value when they cluster due to local IPOs while clustered firms increase in value as they become more isolated due to local delistings. Local firm clustering and risk tolerance also affect IPO underpricing. Empirical findings depict a framework where IPOs and delistings are locally jointly determined.