Do Cross-Listings Drive Regulatory Convergence? Evidence from Germany
University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control
University of Bremen - Faculty of Business Studies and Economics
March 10, 2006
We analyse the cross listing behavior of German firms on the world's major stock exchanges. We find that only a very small minority of firms with capital market orientation cross list. The U.S. and Switzerland are the most popular locations. Taking into account the type of listing in the U.S., we find no evidence for traditional economic motives of cross listings: Firms do not position themselves to raise funds, to lower their cost of capital by shareholder diversification or to reduce agency costs by opting into a more stringent regulation. The economic motives for convergence of stock market regulation seem thin. Cross listing behavior is therefore unlikely to have an impact on the future shape of the stock exchanges.
Number of Pages in PDF File: 15
Keywords: cross listing, stock exchange regulation, bonding hypothesis
JEL Classification: F36, G15working papers series
Date posted: May 18, 2006
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