This paper examines the relationship between firm internationalization and cost of equity.We find that firms with a higher degree of international operations have a significantly lower cost of equity,which is more pro...This paper examines the relationship between firm internationalization and cost of equity.We find that firms with a higher degree of international operations have a significantly lower cost of equity,which is more pronounced for firms in provinces with a weak institutional environment or firms experiencing intense domestic competition.Our results are robust after adopting a firm fixed effect model,propensity score matching,difference-in-difference regressions and alternative measurements of key variables.Further,international operations help firms to break through their institutional constraints in the domestic market,which reduces the cost of equity and improves resource allocation efficiency in the capital market.Our paper enriches the literature on firm internationalization and the cost of equity from the perspective of emerging markets.展开更多
基金supported by the National Natural Science Foundation of China(Project Nos.71790603,72002223,72002159)financial support from the Youth Foundation of Social Science and Humanity,China Ministry of Education(Project No.19YJC790160)the China Postdoctoral Science Foundation(Project No.2020M673032)
文摘This paper examines the relationship between firm internationalization and cost of equity.We find that firms with a higher degree of international operations have a significantly lower cost of equity,which is more pronounced for firms in provinces with a weak institutional environment or firms experiencing intense domestic competition.Our results are robust after adopting a firm fixed effect model,propensity score matching,difference-in-difference regressions and alternative measurements of key variables.Further,international operations help firms to break through their institutional constraints in the domestic market,which reduces the cost of equity and improves resource allocation efficiency in the capital market.Our paper enriches the literature on firm internationalization and the cost of equity from the perspective of emerging markets.
