SEMINAR SERIES No. 13/1314
Incorporation in Offshore Financial Centers:
Naughty or Nice?
Prof. Warren Bailey
Professor of Finance
Samuel Curtis Johnson Graduate School of Management
We examine how the choice of legal and regulatory environment affects a firm’s market value and attractiveness to investors. Incorporation in an offshore financial center is associated with lower Tobin’s q and initial public offering returns, and is more likely to be selected by poorly-governed or low growth firms. However, offshore incorporated firms are not shunned by US institutional investors. Moreover, firms from a few countries appear to benefit from offshore incorporation, after controlling for firm-level governance. Thus, the firm’s choice of legal domicile is not necessarily value- destroying but must be assessed jointly with other firm and home country characteristics.
Date: June 3, 2014 (Tuesday)
A Short Biography of Prof. Warren Bailey
Prof. Bailey holds a PhD in Finance from the University of California Los Angeles and an MBA in Finance from McGill University. His research interests include international finance, international securities markets, and investments. He has a special interest in emerging capital markets, particularly in Asia. He has been features and quoted extensively in the financial and mainstream press, including The New York Times, The Economist, and The Far Eastern Economic Review, and television interviews on CNN-FN and CNBC.
Prof. Bailey is an Associate Editor of The Journal of Financial and Quantitative Analysis and The Pacific Basin Finance Journal. He received the Class of 1992 Award for Teaching Excellence and the Stephen Russell Distinguished Teaching Award in 1999.