Foreign Cultures, Sarbanes-Oxley Act and Cross-Delisting
Mary Schmid Daugherty
University of St. Thomas (Minnesota) - Department of Financial Management
University of St. Thomas (Minnesota) - University of St. Thomas, Minneapolis
February 16, 2011
Using a sample of foreign firms delisting shares from the United States over the period 2000 and 2004, this paper studies the impact of Sarbanes-Oxley Act (SOX) on the cross-delisting behavior of foreign firms based on the firm characteristics, legal tradition, overall culture and degree of individualism of the country of domicile. Pre-SOX, the propensity to delist is lower for firms from countries with cultural similarities to the U.S. and higher for firms from individualistic societies. Post-SOX these trends are reversed. Consistent with the existing research we find that the delisting decision of foreign firms cross-listed in the U.S. is based on the potential gains from listing based on the growth opportunities, length of presence in the U.S. and legal regulations of the country of domicile.
Number of Pages in PDF File: 34
Keywords: ADRs, Sarbanes-Oxley Act, Cross-listing, Delisting, Bonding, Reputation, Culture, Individualism, Hofstede Cultural Dimensions, International Finance
JEL Classification: G15, K22working papers series
Date posted: February 19, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.672 seconds