Cross-Listings and M&A Activity: Transatlantic Evidence

20 Pages Posted: 24 Apr 2005

See all articles by Pasi Tolmunen

Pasi Tolmunen

Tulane University, Department of Economics

Sami Torstila

Aalto University

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Abstract

We analyze whether European firms choose to list shares in the US to facilitate acquisitions. Evidence from a sample of 547 European companies shows that cross-listed firms are significantly more active in acquiring US companies than are their domestically listed peers. This pattern holds even after we account for self-selection in the cross-listing decision. Crosslisted firms are also more likely to use equity payment in large transactions, but after taking self-selection into account, transaction size becomes the key determinant of the use of equity. After cross-listing, the proportion of aggregate M&A volume financed with equity increases.

Suggested Citation

Tolmunen, Pasi and Torstila, Sami, Cross-Listings and M&A Activity: Transatlantic Evidence. Financial Management, Vol. 34, No. 1, Spring 2005. Available at SSRN: https://ssrn.com/abstract=704086

Pasi Tolmunen

Tulane University, Department of Economics ( email )

New Orleans, LA 70118
United States

Sami Torstila (Contact Author)

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland
+358 40 353 8069 (Phone)

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