Wealth effects of foreign expansion by U.S. banks

Article Abstract:

The market values of US banks are examined to determine if they are affected by the banks' expansion in overseas markets. Findings show that shareholders of American multinational banks observe unusual returns of -0.17% when the banks' plans to go global are made public. This indicates that the benefits of foreign expansion are less than the costs and risks associated with international diversification. The results also show an inverse relationship between abnormal returns and post-announcement adjustments in the total variance of returns and in the unsystematic risk of multinational banks.

Banking Institutions, Depository Credit Intermediation, DEPOSITORY INSTITUTIONS, Research, Banking industry, Foreign operations, Banks (Finance), International business enterprises, Multinational corporations, International banking

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Price transmission dynamics between ADRs and their underlying foreign securities

Article Abstract:

Research into pricing factors for American Depository Receipts is presented, focussing on the comparative importance of the price of the underlying foreign security, the exchange rate and the US index.

Stocks & Other Equity Securities, United States, Prices and rates, Investments, American depository receipts, American depositary receipts

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Investor heterogeneity, market segmentation, leverage and the equity premium puzzle

Article Abstract:

A model for equity prices, or the equity premium puzzle is given. Leverage, market segmentation, and investor heterogeneity are taken into consideration. A unique debt equilibrium ratio is also found.

Securities and Commodity Exchanges, Security and commodity exchanges, Securities Exchanges, Statistical Data Included, Models, Stocks, Stock-exchange, Stock exchanges, Investors, Assets (Accounting)

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