Abstract

http://ssrn.com/abstract=1535364
 
 

References (55)



 


 



Cross-Listing in the U.S. and Domestic Investor Protection


Thomas O’Connor


National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics

2006

Quarterly Review of Economics and Finance, Vol. 46, pp. 413-446, 2006

Abstract:     
Using the change in ordinary dividend payout as a proxy for improved governance, I show that cross-listing in the U.S. is associated with enhanced protection for the minority ordinary shareholders of exchange listed non-U.S. firms. These firms substitute dividends for enhanced governance. I find no such effect for Rule 144a firms. Interestingly, I document evidence inconsistent with the legal bonding hypothesis for Level 1 firms. I believe that their ability to pay lower dividends post-listing is primarily due to their ability to credibly commit to fair treatment of their minority investors, given their record for equitable treatment of their ordinary shareholders. They achieve this reputation by consistently paying out a sizable proportion of their earnings as dividends. I find that the firm-level governance of Level 1 firms, as measured by the number of closely held shares improves in the post-listing period. I find no such effect for Rule 144a traded firms. My results also have important implications for the agency models of dividends.

Number of Pages in PDF File: 24

Keywords: Cross-listing, legal bonding, dividend policy

JEL Classification: G15, G34, G35, C34

Accepted Paper Series





Download This Paper

Date posted: January 12, 2010  

Suggested Citation

O’Connor, Thomas, Cross-Listing in the U.S. and Domestic Investor Protection (2006). Quarterly Review of Economics and Finance, Vol. 46, pp. 413-446, 2006. Available at SSRN: http://ssrn.com/abstract=1535364

Contact Information

Thomas O'Connor (Contact Author)
National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics ( email )
County Kildare
Ireland
Feedback to SSRN


Paper statistics
Abstract Views: 450
Downloads: 66
Download Rank: 208,380
References:  55

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.391 seconds