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The US Equity Valuation Premium, Globalization, and Climate Change Risks

Author

Listed:
  • Stulz, Rene M.

    (Ohio State U and ECGI)

  • Doidge, Craig

    (U of Toronto)

  • Karolyi, George Andrew

    (Cornell U)

Abstract

In the 2000s, US firms have higher valuations than comparable non-US firms listed only outside the US but not non-US firms cross-listed in the US. Though one would expect this US valuation premium to fall over time because of globalization, it widens for firms in developed markets by 36% and falls for firms in emerging markets by 20% after the global financial crisis of 2007-2008. This evolution is explained in part by the decreased valuation of brown firms in other developed countries relative to the US. Other potential explanations are explored and rejected.

Suggested Citation

  • Stulz, Rene M. & Doidge, Craig & Karolyi, George Andrew, 2023. "The US Equity Valuation Premium, Globalization, and Climate Change Risks," Working Paper Series 2023-21, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    • Handle: RePEc:ecl:ohidic:2023-21
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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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