Internationalization and Firm Valuation: New Evidence from First Offshore Bond Issuances of US Firms

52 Pages Posted: 6 Feb 2018 Last revised: 28 Jan 2022

See all articles by Nebojsa Dimic

Nebojsa Dimic

University of Vaasa

Vitaly Orlov

University of St. Gallen - School of Finance

Vanja Piljak

University of Vaasa - Department of Accounting and Finance

Date Written: January 14, 2022

Abstract

Does internationalization affect firm valuation? To answer this question, literature mainly considers firms from around the world internationalizing by issuing equity in the USA, whereas the current study focuses on US firms that internationalize by issuing debt in overseas markets. This paper provides evidence on theories of internationalization and capital structure, finding that overseas corporate debt offerings have a positive short-term effect on US firms’ valuations. The effect varies in firm characteristics, timing, and the location of the issue. Additionally, firms with a strong need for external funds and growth prospects accelerate their offshore public debt market entry.

Keywords: Internationalization; Dept Structure; Segmentation; Tobin's

JEL Classification: G15; G32; F36

Suggested Citation

Dimic, Nebojsa and Orlov, Vitaly and Piljak, Vanja, Internationalization and Firm Valuation: New Evidence from First Offshore Bond Issuances of US Firms (January 14, 2022). University of St.Gallen, School of Finance Research Paper No. 2018/3, Available at SSRN: https://ssrn.com/abstract=3118306 or http://dx.doi.org/10.2139/ssrn.3118306

Nebojsa Dimic (Contact Author)

University of Vaasa ( email )

Wolffintie 34
Vaasa, 65200
Finland

Vitaly Orlov

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

Vanja Piljak

University of Vaasa - Department of Accounting and Finance ( email )

P.O. Box 700
FIN-65101 Vaasa, FI-65101
Finland

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