"The Dutch Discount: Evidence from a Propensity Score Matching Model This thesis makes use of a Propensity Score Matching approach that provides evidence against the existence of the Dutch discount."

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The purpose of this study is to estimate the effect of the Dutch institutional environment on its listed companies’ market values, relative to foreign-listed peer companies. In proving evidence in favour of or against the Dutch Discount, I compare Dutch listed companies with their peers on stock exchanges in the US, UK, Germany and France. Two statistical approaches are used in this thesis. The first approach estimates the effect of being a Dutch listed company on market value in comparison to a non-Dutch listed company, based on propensity score matching. The second approach uses Difference-in-Difference in combination with propensity score matching to gain unbiased effect estimates by estimating the average treatment effects of Dutch listed companies for a situation in which the trend over time is the same between the treated and non-treated groups in the absence of the treatment. Overall, the findings of this study disprove the existence of a Dutch discount. Even though a simple OLS-approach hints the existence of the Dutch discount, both my PSM-models indicate the non-existence of a Dutch discount. Even more so, my findings suggest a premium for the Dutch sample, relative to the common law country samples (US & UK). Therefore, my findings contradict results of the empirical study of La Porta et al. (2002).
Faculteit der Managementwetenschappen