Vicentiu Covrig

Home Bias, Foreign Mutual Fund Holdings, and the Voluntary Adoption of International Accounting Standards

We test the assertion that a consequence of voluntarily adopting International Accounting Standards (IAS) is the enhanced ability to attract foreign capital. Using a unique database that reports firm-level holdings of over 25,000 mutual funds from around the world, our multivariate tests find that average foreign mutual fund ownership is significantly higher among IAS adopters. We also find that IAS adopters in poorer information environments and with lower visibility have higher levels of foreign investment, consistent with firms using IAS adoption to provide more information and/or information in a more familiar form to foreign investors. Taken together, our findings are consistent with voluntary IAS adoption reducing home bias among foreign investors and thereby improving capital allocation efficiency.

Public versus Private Market Participants and the Prices Paid for Private Companies

Abstract This study examines the impact of the market participant on prices paid for private companies in the Pratt’s Stats database. We examine approximately 4,200 transactions over the period of 2000–2011 for companies with sales of

Location and the Liquidity of Private Businesses

1 million or more. We find that public buyers pay more after controlling for the target’s size, industry, age, estimated growth rate, and profitability, as well as the time of the transaction. We also find that smaller companies and C-corporations sell at higher multiples. Our results are consistent with the hypothesis that the price paid for a company is related to whether the market participant is private or public. Further, our results provide additional insights to users of the Pratt’s Stats database regarding the characteristics of the transactions in this well-known and often-used database.

What Determines the Domestic Bias and Foreign Bias? Evidence from Mutual Fund Equity Allocations Worldwide

Abstract The relative illiquidity of private firms is a fundamental characteristic differentiating them from publicly traded firms. This article fills a void in the business valuation literature by...