Patterns of International Capital Raisings

Abstract

This paper documents several new
 patterns associated with firms issuing securities in foreign
 markets that motivate the need for and help guide future
 research. Besides noting that these international capital
 raisings grew almost four-fold from 1991 to 2005, accounting
 for 35 percent of all capital raised through security
 issuances, the paper has three main findings. First, a large
 and growing fraction of capital raisings, especially debt
 issuances, occurs in international markets, but a very small
 number of firms accounts for the bulk of international
 capital raisings, highlighting the distributional
 implications of financial globalization. Second, changes in
 firm performance following equity and debt issuances in
 international markets are qualitatively similar to those
 following domestic issuances, suggesting that capital
 raisings abroad are not intrinsically different from
 domestic ones. Third, after firms start accessing
 international markets, they significantly increase the
 amount raised in domestic markets, suggesting that
 international and domestic markets are complements.