61 Pages Posted: 26 Nov 2012 Last revised: 25 Apr 2016
Date Written: April 5, 2016
This paper studies cross-country competitive effects of foreign listings on U.S. exchanges. It shows that foreign firms by listing on or delisting from U.S. exchanges affect U.S. companies. The incumbent U.S. firms respond strongly negatively to foreign listings and weakly positively to foreign delistings. The returns and operating performance of U.S. rivals deteriorate after the listings of foreign competitors, consistent with the competitive advantages of foreign listings. This impact differs across various market, industry, and U.S. and foreign firm characteristics. These findings highlight an important role of international markets in influencing the dynamics and corporate decision making of U.S. firms.
Keywords: Firm competition, Difference-in-difference, Firm valuation, Operating performance, Product markets
JEL Classification: G14, G15, G32
Suggested Citation: Suggested Citation