Cross-Listing, Bonding Hypothesis and Corporate Governance

26 Pages Posted: 15 Oct 2007

See all articles by Andreas Charitou

Andreas Charitou

University of Cyprus

Christodoulos Louca

Cyprus University of Technology

Stelios Panayides

University of Cyprus

Abstract

This paper examines the relationship between cross-listing and corporate governance for Canadian firms, that were cross-listed on US stock exchanges during the period 1997-2003. We find that cross-listed firms have more independent boards and audit committees after the listing relative to a non-cross-listed matched sample of firms and relative to the pre-listing period. Moreover, cross-listed firms experience changes in their ownership structure after the listing. Finally, we provide evidence that the sensitivity of the relation between cross-listed firm valuation with audit committee independence and ownership structure becomes more important after the listing. The results are robust after adjusting for various firm risk characteristics. Overall, the results are consistent with the literature on the bonding role of cross-listings on US stock exchanges.

Suggested Citation

Charitou, Andreas and Louca, Christodoulos and Panayides, Stelios, Cross-Listing, Bonding Hypothesis and Corporate Governance. Journal of Business Finance & Accounting, Vol. 34, Issue 7-8, pp. 1281-1306, September/October 2007. Available at SSRN: https://ssrn.com/abstract=1020807 or http://dx.doi.org/10.1111/j.1468-5957.2007.02021.x

Andreas Charitou (Contact Author)

University of Cyprus ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia CY-1678
Cyprus
+357 2 893624 (Phone)
+357 2 895030 (Fax)

Christodoulos Louca

Cyprus University of Technology ( email )

Limassol, 3603
Cyprus

Stelios Panayides

University of Cyprus ( email )

75 Kallipoleos Street
Nicosia CY 1678, Nicosia P.O. Box 2
Cyprus

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