International Cross-Listing, Firm Performance and Top Management Turnover: A Test of the Bonding Hypothesis

59 Pages Posted: 28 Apr 2007

See all articles by Darius P. Miller

Darius P. Miller

Southern Methodist University (SMU) - Finance Department

Ugur Lel

University of Georgia - Department of Banking and Finance; European Corporate Governance Institute (ECGI)

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Abstract

We examine a primary outcome of corporate governance, the ability to identify and terminate poorly performing CEOs, to test the effectiveness of U.S. investor protections in improving the corporate governance of cross-listed firms. We find that firms from weak investor protection regimes that are cross-listed on a major U.S. exchange are more likely to terminate poorly performing CEOs than non-cross-listed firms. Cross-listings on exchanges that do not require the adoption of the most stringent investor protections (OTC, private placements and London listings) are not associated with a higher propensity to shed poorly performing CEOs.

Keywords: CEO turnover, cross-listing, bonding

Suggested Citation

Miller, Darius P. and Lel, Ugur, International Cross-Listing, Firm Performance and Top Management Turnover: A Test of the Bonding Hypothesis. Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=982283

Darius P. Miller

Southern Methodist University (SMU) - Finance Department ( email )

United States

Ugur Lel (Contact Author)

University of Georgia - Department of Banking and Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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