Return Performance and Liquidity of Cross-Listed Central European Stocks

23 Pages Posted: 30 May 2003

See all articles by Martin T. Bohl

Martin T. Bohl

University of Muenster

Piotr Korczak

University of Bristol - Department of Finance and Accounting

Abstract

This paper provides an empirical investigation of cross-listing's implications for companies and stock exchanges in the newly-established capital markets in Central Europe. We find that companies experience a permanent value enhancement, and cumulative abnormal returns reach a strongly significant level of 25% around Depository Receipts offering. The results show that cross-listing is an efficient tool of raising capital when the local market is underdeveloped. We observe that stock liquidity improves after international listing what indicates that foreign trading venues attract new investors and do not deteriorate local capital markets' quality. Average turnover ratio in the domestic market increases significantly by 34%.

Keywords: international cross-listing, Central European stocks, Depository Receipts

JEL Classification: G14, G15, G20

Suggested Citation

Bohl, Martin T. and Korczak, Piotr, Return Performance and Liquidity of Cross-Listed Central European Stocks. Available at SSRN: https://ssrn.com/abstract=404141 or http://dx.doi.org/10.2139/ssrn.404141

Martin T. Bohl (Contact Author)

University of Muenster ( email )

Schlossplatz 2
D-48149 Muenster, D-48149
Germany

Piotr Korczak

University of Bristol - Department of Finance and Accounting ( email )

8 Woodland Road
Bristol BS8 1TN
United Kingdom
+44 117 394 1491 (Phone)

HOME PAGE: http://sites.google.com/view/piotrkorczak/home

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