The Long-Term Effects of Cross-Listing, Investor Recognition, and Ownership Structure on Valuation

Posted: 1 Jun 2009

See all articles by Michael R. King

Michael R. King

Gustavson School Of Business

Dan Segal

Interdisciplinary Center (IDC) Herzliyah

Date Written: June 2009

Abstract

We show that investor recognition and bonding associated with a U.S. cross-listing are distinct effects using a sample of Canadian firms. In contrast to the post-listing decline documented in the literature, we find that cross-listed firms with a single class of shares enjoy a permanent increase in valuation if they attract and maintain investor recognition over time. Valuations of firms that fail to widen their U.S. shareholder base return to pre-listing levels within two years. Cross-listed firms with dual-class shares exhibit a permanent increase in valuation regardless of the level of U.S. investor holdings, consistent with firm-level bonding.

Keywords: G12, G15

Suggested Citation

King, Michael Robert and Segal, Dan, The Long-Term Effects of Cross-Listing, Investor Recognition, and Ownership Structure on Valuation (June 2009). The Review of Financial Studies, Vol. 22, Issue 6, pp. 2393-2421, 2009, Available at SSRN: https://ssrn.com/abstract=1408427 or http://dx.doi.org/hhn050

Michael Robert King (Contact Author)

Gustavson School Of Business ( email )

University of Victoria
Business & Economics Building, Room 246
Victoria, British Columbia V8W 2Y2
Canada
250-721-6425 (Phone)

HOME PAGE: http://https://www.uvic.ca/gustavson/faculty/faculty/faculty/current/kingm.php

Dan Segal

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

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