Abstract

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The Overseas Listing Decision: New Evidence of Proximity Preference


Sergei Sarkissian


McGill University

Michael J. Schill


University of Virginia – Darden Graduate School of Business Administration

March 22, 2004

Review of Financial Studies, 2004, 17(3), 769-809
Darden Business School Working Paper No. 03-07

Abstract:     
Using a cross-section of effectively the entire universe of overseas listings across world markets, we examine the market preferences of firms listing their stock abroad. We find that geographic, economic, cultural, and industrial proximity plays the dominant role in the choice of overseas listing venue. Contrary to the notion that firms maximize international portfolio diversification gains in listing abroad, cross-listing activity is more common across markets for which diversification gains are relatively low. Our findings imply that the same proximity constraints that are believed to lead to "home bias" in investment portfolio decisions also exert a profound influence on financing decisions.

Number of Pages in PDF File: 57

Keywords: Cross-listings, Familiarity Bias, Diversification

JEL Classification: G15, G32

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Date posted: May 29, 2003 ; Last revised: November 13, 2012

Suggested Citation

Sarkissian, Sergei and Schill, Michael J., The Overseas Listing Decision: New Evidence of Proximity Preference (March 22, 2004). Review of Financial Studies, 2004, 17(3), 769-809; Darden Business School Working Paper No. 03-07. Available at SSRN: http://ssrn.com/abstract=267103 or http://dx.doi.org/10.2139/ssrn.267103

Contact Information

Sergei Sarkissian (Contact Author)
McGill University ( email )
1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada
514-398-4876 (Phone)
514-398-3876 (Fax)
Michael J. Schill
University of Virginia – Darden Graduate School of Business Administration ( email )
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4071 (Phone)
434-243-7676 (Fax)
HOME PAGE: http://www.darden.virginia.edu/faculty/schill.htm
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