Cross-Country Competitive Effects of Cross-Listings
Review of Corporate Finance Studies, 2020, 9(1), 116-164.
71 Pages Posted: 26 Nov 2012 Last revised: 24 Mar 2020
Date Written: April 5, 2016
We study competitive effects of foreign listings on U.S. stock exchanges over a 50-year period and show that U.S. rival firms respond strongly negatively (weakly positively) to foreign listings (delistings). The performance decline of U.S. firms is related to the competitive advantages that foreign firms receive from their cross-listings, such as stronger financial benefits, higher growth prospects, and better visibility, rather than market or industry valuation timing or existing market competition. This decline is especially pronounced when cross-listings come from proximate or developed markets. Our findings highlight an important role of international markets in influencing the performance of U.S. firms.
Keywords: Abnormal returns; Asset ratio; EBIT; Market share; Product markets
JEL Classification: D22; F30; G14; G15; G32; M41
Suggested Citation: Suggested Citation