Does Cross-Listing in the US Foster Mergers and Acquisitions and Increase Target Shareholder Wealth?

65 Pages Posted: 2 Jul 2010 Last revised: 29 Nov 2010

Date Written: November 26, 2010

Abstract

We examine the role of cross-listing in alleviating domestic market constraints and facilitating cross-border mergers and acquisitions. Cross-listing appears to strengthen the bargaining power of target firms, allowing them to extract higher takeover premiums relative to their non-cross-listed peers. Moreover, shareholders of Sarbanes-Oxley-compliant targets seem to benefit from a higher premium. We also find that cross-listed firms are more likely to be acquisition targets. This evidence is consistent with the idea that cross-listing increases firms' attractiveness and visibility on the market for corporate control. Our results are robust to various specifications and to the self-selection bias arising from the decision to cross-list.

Keywords: Cross-Listing, Mergers & Acquisitions, Governance, Sarbanes-Oxley Act

JEL Classification: G15, G34, K00

Suggested Citation

Cosset, Jean-Claude and Meknassi, Siham, Does Cross-Listing in the US Foster Mergers and Acquisitions and Increase Target Shareholder Wealth? (November 26, 2010). Available at SSRN: https://ssrn.com/abstract=1633041 or http://dx.doi.org/10.2139/ssrn.1633041

Jean-Claude Cosset (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada
514-340-6872 (Phone)
514-340-6987 (Fax)

Siham Meknassi

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Register to save articles to
your library

Register

Paper statistics

Downloads
212
Abstract Views
1,286
rank
141,940
PlumX Metrics