Journal of International Business Studies

, Volume 24, Issue 4, pp 763–784 | Cite as

International Listings of Stocks: The Case of Canada and the U.S.

  • Stephen R. Foerster
  • G. Andrew Karolyi


The globalization of financial markets has seen ever-increasing numbers of firms choosing to list their stocks on foreign exchanges. We examine whether the extent of economic and financial market integration (or segmentation) between a firm's home country and listing country influences stock price reaction by examining the case of two “similar” countries: the U.S. and Canada. During the 100 days before the week of interlisting in the U.S., (risk-adjusted) stock prices of Canadian firms rise (on average) by over 9.4%, rise by an additional 2% around the interlisting date, but follow with a corresponding drop of 9.7% in the 100 days after interlisting. We interpret this evidence to be consistent with the financial market segmentation between Canada and the U.S. However, a subsample of Canadian resource firms does not exhibit these stock price effects, suggesting industry-related factors may also be an important determinant of integration. We also find average trading volume in interlisted stocks more than doubles in the months following interlisting.


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Copyright information

© Academy of International Business 1993

Authors and Affiliations

  • Stephen R. Foerster
    • 1
  • G. Andrew Karolyi
    • 2
  1. 1.The University of Western Ontario
  2. 2.The Ohio State University

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