Determinants of Involuntary Cross-Listing: U.S. Restaurant Companies’ Perspective
International Journal of Contemporary Hospitality Management, Vol. 25 No. 7, 2013
Posted: 26 Apr 2014
Date Written: December 1, 2013
This paper uncovers the phenomenon of involuntary CL, which many stock exchanges have strategically adopted by simplifying listing requirements for companies already listed in other stock markets, focusing on US restaurant companies. The number of involuntarily cross-listed US restaurant companies greatly increased to 50 percent of domestically listed US restaurant companies while those companies are largely unaware of the phenomenon. The empirical investigation identified determinants of involuntary CL by examining ten factors, including size, firm growth opportunities, leverage, financial flexibility, international operation, profitability, overall German economic condition, industry growth opportunities, restaurant type, and local operation. The study found three determinants – large size, favorable economic condition in Germany and positive industry growth opportunities – utilizing the sample that covers the entire periods of involuntary CL of US restaurant companies on the FSE.
Keywords: Involuntary cross-listing, Cross-listing, Determinants, Frankfurt Stock Exchange, Restaurants, Stocks, Stock exchanges
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