Cross Listing Behavior

Posted: 16 Nov 2010

See all articles by Thomas O’Connor

Thomas O’Connor

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

Kate Phylaktis

City University London - Sir John Cass Business School

Date Written: November 16, 2010

Abstract

This chapter provides a summary of international cross-listing behavior. It discusses the internal and external factors, which prompt firms to cross-list in the first instance, where to cross-list, and for some, cross-delist. It also examines the behavior of firms once they crosslist. Also discussed are capital raising and investment behavior, the behavior of controlling insiders once firms cross-list, and the effect of cross-listing behavior on firm value. The general conclusions suggest that internal factors predominantly explain cross-listing and delisting behavior. Large firms with sizable growth opportunities tend to cross-list. When these growth opportunities disappear, firms cross-delist. Proximity predominantly dictates where firms cross-list. Firms typically list in countries that are geographically, culturally, and economically close to their own. The behavior of controlling insiders is altered once firms cross-list as a result of legal and market-wide forces. Firm value increases as a result of cross-listing, but general disagreement exists about the durability of these valuation gains.

Keywords: International Cross-Listings, Cross-Delistings, Valuation, Bonding, Capital-Raising

Suggested Citation

O'Connor, Thomas and Phylaktis, Kate, Cross Listing Behavior (November 16, 2010). Available at SSRN: https://ssrn.com/abstract=1709998 or http://dx.doi.org/10.2139/ssrn.1709998

Thomas O'Connor (Contact Author)

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

County Kildare
Ireland

Kate Phylaktis

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom
+44 20 70408735 (Phone)
+44 20 70408881 (Fax)

HOME PAGE: http://www.cass.city.ac.uk/faculty/k.phylaktis/

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