Does Cross Listing in the U.S. Really Enhance the Value of Emerging Market Firms?

Review of Accounting and Finance, Vol. 8, No. 3, pp. 308-336, 2009

29 Pages Posted: 12 Jan 2010

See all articles by Thomas O’Connor

Thomas O’Connor

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting

Date Written: 2009

Abstract

In this paper, I study the valuation effects of cross listing in the U.S. for a panel of emerging market firms over the period from 1990 to 2003. In line with Kristian-Hope et al. (2007), I find that only those firms from high disclosure regimes gain from Level 2/3 listing in the U.S. The gains are not immediate, but materialize once the firm has listed in the U.S. for at least five years. I also document long-term, but not immediate valuation gains for Level 1 over-the-counter issues. In contrast to Level 2/3 issues, the gains are concentrated amongst firms from low-disclosure regimes. I find no positive valuation effects for Rule 144a private placements. The results suggest that the decision on the part of the majority of firms from low-disclosure regimes not to list as exchange traded depositary receipts is warranted.

Keywords: Cross listing, corporate valuation, emerging markets

JEL Classification: G15, G34, G35

Suggested Citation

O'Connor, Thomas, Does Cross Listing in the U.S. Really Enhance the Value of Emerging Market Firms? (2009). Review of Accounting and Finance, Vol. 8, No. 3, pp. 308-336, 2009 , Available at SSRN: https://ssrn.com/abstract=1535462

Thomas O'Connor (Contact Author)

National University of Ireland, Maynooth (NUI Maynooth) - Department of Economics, Finance and Accounting ( email )

County Kildare
Ireland

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