Entrepreneurship, financial development and threshold effects on foreign listings

This paper examines financing abroad from the joint perspectives of international financial development and entrepreneurship. At the micro-level, we show that start-ups in countries with better entrepreneurial opportunities increase foreign listing activities. Types of entrepreneurships have varying effects on foreign listing between developed and developing countries. At the macro level, we show that the relationship between foreign listings and financial development follows an inverted U-shaped pattern through the stock market channel. Through the bank credit channel, there is a diminishing effect of foreign listings with increases of bank credits. Under the venture capital channel, however, positive effects on foreign listings are found only for high levels of venture capital availability.