Global Disclosure Practices of U.S. Corporations Entering Overseas Equity Markets
Posted: 27 Feb 1998
This study examines the global disclosure practices of U.S. companies that list equities in overseas markets. We focus on two questions: First how (if at all) do the frequency mix and timing of a firm's disclosures change in an overseas market when the firm lists equity in that market? Second after a U.S. firm has listed overseas are its disclosures in the overseas market as frequent and as timely as in the U.S.? We observe that U.S. firms listing in the U.K. and in Continental Europe do not increase the frequency of timeliness of accounting disclosures they make in Europe during the post-listing period. In contrast the private U.S. firms making initial public offerings in the U.K. and U.S. firms listing existing equity in Japan do increase disclosure frequency and timeliness. We also find that U.S. firms make fewer and less timely accounting disclosures in non-U.S. markets than in the U.S. during the post-listing period. These results suggest that since acquiring and maintaining an equity listing in the U.K. and Continental Europe is inexpensive and monitoring and enforcement of disclosure rules is not stringent U.S. firms might list in those markets even when they have little serious intention of expanding their shareholder bases or complying with the disclosure rules there. In contrast since listing equity in Japan is comparatively expensive perhaps the only firms that list in Japan are those that believe they can benefit significantly from the foreign listing and this may influence their disclosure choices.
JEL Classification: M41
Suggested Citation: Suggested Citation