Corporate Governance and Cross-Listing: Evidence from European Companies

31 Pages Posted: 21 Sep 2004

See all articles by Rob Bauer

Rob Bauer

Maastricht University

Dariusz Wojcik

University of Oxford, St. Peter's College

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Abstract

This paper documents the relationship between cross-listing and corporate governance of the largest European companies between 2000 and 2003. Companies with a U.S. cross-listing, and particularly those listed on a U.S. stock exchange had higher corporate governance ratings than companies without a U.S. cross-listing. Corporate governance advantage of the U.S. cross-listed firms holds if we control for the country of origin and other company characteristics, and it was more consistent in 2003 than in 2000, suggesting a possible impact of the Sarbanes-Oxley Act. The U.S. cross-listed firms had higher ratings not only in terms of disclosure but also in terms of board structure and functioning. In contrast, they had no advantage in terms of shareholders' rights and duties. The advantage of U.S. cross-listed firms can be traced back to at least a couple of years before the time of cross-listing, which leaves the question whether their superior corporate governance is the effect of U.S. cross-listing open. In contrast to the importance of cross-listing in the U.S., there is no significant relationship between corporate governance and cross-listing within Europe. Implications are drawn for the debate on bonding and the future of European stock markets.

Keywords: corporate governance, cross-listing, bonding, Europe, ADRs

JEL Classification: G15, G34, K00, P51

Suggested Citation

Bauer, Rob and Wojcik, Dariusz and Clark, Gordon L., Corporate Governance and Cross-Listing: Evidence from European Companies. Available at SSRN: https://ssrn.com/abstract=593364 or http://dx.doi.org/10.2139/ssrn.593364

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883871 (Phone)

Dariusz Wojcik (Contact Author)

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

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