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Does Cross Listing Lead to Higher Firm Growth

Review of Finance, Forthcoming

Posted: 3 Sep 2007  

Inder K. Khurana

University of Missouri at Columbia - Robert J. Trulaske, Sr. College of Business

Xiumin Martin

Washington University in Saint Louis - Olin School of Business

Raynolde Pereira

University of Missouri at Columbia - School of Accountancy

Abstract

Extant research posits that cross-listing improves firms' access to lower cost external financing. But so far, there is scarce evidence that improved access to external funds through cross-listing contributes to higher firm growth. Documenting the relation between firm growth and cross-listing is critical because the presumption in prior research is that funds raised via cross-listing will be channeled towards potentially profitable projects. Using a sample of firms from 37 countries that are cross-listed in the U.S., we find a positive association between cross-listing and subsequent externally-financed firm growth rates. However, we do not find that increases in externally-financed firm growth after cross-listing vary systematically as a function of the home-country attributes of the cross-listed firms. Overall, our results provide new and direct evidence on the impact of cross-listing on firm growth rates.

Keywords: Cross Listing, External Financing, Cost of Capital, Firm Growth

JEL Classification: G15, G24, G31

Suggested Citation

Khurana, Inder K. and Martin, Xiumin and Pereira, Raynolde, Does Cross Listing Lead to Higher Firm Growth. Review of Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1011385

Inder Khurana (Contact Author)

University of Missouri at Columbia - Robert J. Trulaske, Sr. College of Business ( email )

331 Cornell Hall
Columbia, MO 65211
United States
573-882-3474 (Phone)
573-882-2437 (Fax)

Xiumin Martin

Washington University in Saint Louis - Olin School of Business ( email )

Saint Louis, MO 63130
United States

Raynolde Pereira

University of Missouri at Columbia - School of Accountancy ( email )

337 Cornell Hall
Columbia, MO 65211
United States
573-882-6253 (Phone)

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