Download or read book The impact of cross listing on the stock price and the volatility in the domestic market written by Maria Thomopoulou and published by . This book was released on 2005 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Impact of Cross Listing on the Home Market s Information Environment and Stock Price Efficiency written by Olga Dodd and published by . This book was released on 2016 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: An improvement in a firm's information environment is one possible benefit of cross-listing a firm's shares. We empirically examine the changes in the information asymmetry and informational efficiency of prices of cross-listed stocks in their home market around a firm's cross-listing in the US. Using intraday stock trading data we estimate market microstructure measures of information asymmetry, including the effective spread, information asymmetry components of the spread and price impact, and intraday stock return autocorrelation as a measure of price efficiency. Our results suggest that cross-listing in the US is associated with a significant improvement in the quality of the firm's information environment and stock price efficiency in the home market. The improvement in the information environment is stronger for cross-listings that take place after the adoption of the Sarbanes-Oxley Act in the US in 2002. Overall, our results provide broad support for the legal and reputational bonding hypotheses and demonstrate that stricter disclosure associated with a US cross-listing is beneficial.

Download or read book The Impact of Foreign Cross Listings on Symmetric Information Spillovers between Markets written by Koulakiotis Athanasios and published by . This book was released on 2004 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops the approach suggested by Howe, Madura and Tucker (1993) to examine the impact of cross listing on stock price volatility in Europe. A primary focus of this paper is to provide a different methodology than the one adopted by Howe, Madura and Tucker (1993) using a modified GARCH (Generalized Autoregressive Conditional Heteroskedasticity) modeling approach as suggested by Li and Engle (1998), to examine the impact of cross-listings on volatility spillovers. The analysis also takes into account the influence of different regulatory structures across the markets where firms are cross-listed. In particular, we use LaPorta et al.'s (1998) broad stock market regulatory classification to analyze the magnitude and persistence of volatility spillovers from the foreign listing to the home equity of cross listed companies in the Paris stock exchange. We find that information spillover effects are important for the Paris market for cross-listed equities and that different regulatory environments have a significant impact on information spillovers. Volatility transmissions from foreign listing in lax regulatory environments appear to be more important for spillovers to home equity cross-listings in the case of the French stock exchange.

Download or read book Price Liquidity Volatility and Volume of Cross listed Stocks written by Olga Dodd and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines the possible implications of international cross-listings for the wealth of shareholders, for stock liquidity and volatility, and for the distribution of trading volumes across both the domestic and foreign stock markets where the shares are traded. For the purpose of clarity, these three issues are analysed in three empirical chapters in the thesis. The first empirical issue examined in this thesis is the effects of international cross-listings on shareholders? wealth. This is discussed in chapter 2. The chapter compares the gains in shareholders? wealth that result from cross-listing in the American, British, and European stock exchanges and then evaluates their determinants by applying various theories on the wealth effects of cross-listing. Moreover, it evaluates how the wealth effect of cross-listing has changed over time reflecting the implications of the significant developments in capital markets that have taken place in recent years. In particular, the effects of the introduction of the Euro in Europe and the adoption of the Sarbanes-Oxley Act in the US are analysed. The findings suggest that, on average, cross-listing of stocks enhances shareholders? wealth but the gains are dependent on the destination market. In addition, the regulatory and economic changes in the listing environment not only alter the wealth effects of cross-listings, but also affect the sources of value creation. Overall, this chapter provides in-depth insights into the motivations for, and the benefits of, cross-listings across different host markets in changing market conditions. The second empirical issue examined is the impact of cross-listing and multimarket trading on stock liquidity and volatility (chapter 3). Cross-listing leads to additional mandatory disclosure in order to comply with the requirements of the host market. Such requirements are expected to reduce information asymmetry among various market participants (corporate managers, stock dealers, and investors). An enhanced information environment, in turn, should increase stock liquidity and reduce stock return volatility. The findings of this study suggest that the stock liquidity and volatility improves after cross-listing on a foreign stock exchange. Moreover, this study distinguishes between cross-listing and cross-trading. The distinction is important because cross-trading, unlike cross-listing, does not require the disclosing of additional information. Although such a distinction means there is a variation in the information environment of cross-listed and cross-traded stocks, the results do not reveal any significant difference in the liquidity and volatility of the stocks that are cross-listed and cross-traded. This evidence suggests that the improvement in the liquidity and volatility of cross-listed/traded stocks comes primarily from the intensified competition among traders rather than from mandatory disclosure requirements. The final empirical issue investigated in this thesis (chapter 4) is the identification of the determinants of the distribution of equity trading volume from both stock exchange and firm specific perspectives. From a stock exchange perspective, exchange level analysis focuses on the stock exchange characteristics that determine the ability of a stock exchange to attract trading of foreign stocks. While from a firm perspective, firm level analysis focuses on firm specific characteristics that affect the distribution of foreign trading. The results show that a stock exchange?s ability to attract trading volumes of foreign equity is positively associated with a stock exchange?s organizational efficiency, market liquidity, and also the quality of investor protection and insider trading regulations. Analysis also reveals the superior ability of American stock exchanges to attract trading of European stocks. Moreover, there is strong evidence suggesting that regulated stock exchanges are more successful in attracting trading of foreign stocks than non-regulated markets, such as OTC and alternative markets and trading platforms. From a firm perspective, the proportion of trading on a foreign exchange is higher for smaller and riskier companies, and for companies that exhibit lower correlation of returns with market index returns in the host market. Also this proportion is higher when foreign trading takes place in the same currency as trading in the firm?s home market and increases with the duration of a listing. Finally, the study provides separate evidence on the expected levels of trading activity on various stock exchanges for a stock with particular characteristics. Overall, the findings of this thesis suggest that international cross-listing is beneficial for both firms and their shareholders but the findings also suggest that there are significant variations in the implications of cross-listings for different firms and from listing in different destination foreign markets. Finally, these implications are not static and respond to changes and reforms in listing and trading conditions.

Download or read book A Theory of the Impact of International Cross listing written by Ruth Janine Freedman and published by . This book was released on 1991 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Firm Value and Cross listings written by Nicola Cetorelli and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the valuation impact of a firm's decision to cross-list on a more (or less) prestigious stock exchange relative to its own domestic market. We use network analysis to derive broad market-based measures of prestige for forty-five country or regional stock exchange destinations between 1990 and 2006. We find that firms crosslisting in a more prestigious market enjoy significant valuation gains over the five-year period following the listing. We also document a reverse effect for firms cross-listing in less prestigious markets: These firms experience a significant decline in valuation over the five years following the listing. The reputation of the cross-border listing destinations is therefore a useful signal of a firm's value going forward. Our findings are consistent with the view that cross-listing in a prestigious market enhances a firm's visibility, strengthens corporate governance, and lowers informational frictions and capital costs. -- Cross-listings ; network analysis

Download or read book Cross Return Volatility and Order Imbalance in International Cross Listings written by Yong-chern Su and published by . This book was released on 2010 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: The globalization of financial markets motivates plenty of non-U.S. companies listing their shares on the U.S. exchanges. Following Eun and Sabherwal (2003), we investigate the extent to which the NYSE and the TSX contribute to price discovery of the Canadian Stocks listing on these exchanges. By examining the effect of contemporaneous order imbalances on cross-border stock returns, we find that contemporaneous imbalance on the NYSE is significant to the stock returns on the TSX. Since the U.S. exchanges are the most liquid and largest exchanges in the world, they play a leading role in capital markets. Our findings imply that the NYSE significantly contributes to price discovery.Besides, we apply GARCH (1, 1) model to test the effect of contemporaneous imbalance on the cross-listing returns and the effect of trading volume on foreign return variance. We find that there is a significant influence of trading volume in domestic/foreign markets on the volatility of the stock return in foreign/domestic markets in our empirical results. The evidence shows that cross-listing helps informed traders distribute their trading across the two markets to make use of private information between the markets. This activity results in the increasing generation of private information, and then causes an increase in the stock return variance. However, contemporaneous order imbalance on the TSX/NYSE does not have an important impact on the stock returns on the NYSE/TSX. It means that order is not a good indicator of information flow. The significance in GARCH (1, 1) model comes from trading volume to the return volatility, not to the stock return. The insignificance for effect of order imbalance on the cross-board return represents limited capital flow between countries. The view supports evidence of segmentation between Canadian and the U.S. markets suggested by Foerster and Karolyi (1993).

Download or read book Stock Price Informativeness Cross Listings and Investment Decisions written by Thierry Foucault and published by . This book was released on 2013 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that a cross-listing allows a firm to make better investment decisions because it enhances stock price informativeness. This theory of cross-listings yield several predictions. In particular, it implies that the sensitivity of investment to stock prices should be larger for cross-listed firms. Moreover, the increase in value generated by a cross-listing (the cross-listing premium) should be positively related to the size of growth opportunities and negatively related to the quality of managerial information. We also analyze in details the effects of the geography of ownership (the distribution of holdings between foreign and domestic investors) on the cross-listing premium. In particular, we show that the sensitivity of the cross-listing premium to the size of growth opportunities increases when holdings (resp. market shares) become more evenly distributed between foreign and domestic investors (resp. markets). Last, we show that concentration of trading in the home market (flow-back) can indeed increase the cross-listing premium for some firms.

Download or read book ADR Listing Effects on Local Stock Exchange Markets written by Alfredo Melchor Mendiola and published by . This book was released on 2005 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book International Cross Listing written by Richard Podpiera and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the effects of market fragmentation and information flows in the case of stocks cross-listed on markets in Central Europe and London. First, we test for co-movement, interaction and error correction behavior between the local and London markets. Our results suggest that strong interactions exist between these markets, with the London market being slightly more important than the local one. The two prices of cross-listed stocks are cointegrated and pricing errors are corrected over a few days. These interactions suggest partial fragmentation. Second, we extend an earlier model to examine the impact of foreign listing on the variance of local returns. The focus of previous studies has concentrated almost exclusively on the return of cross-listed securities. The variance of returns has remained mostly unnoticed, even though some studies noted an increase of variance after the cross-listing. In our model, we introduce a new factor that influences return variance: tighter interaction with foreign markets as a consequence of cross-listing. Estimation results lend support to our model.

Download or read book Cross listing and Firm specific Information written by Shan Li and published by . This book was released on 2013 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine the impact of cross-listing on firm-specific information utilizing the unique features of the Chinese capital markets. By separating the trading activity of domestic Chinese investors from that of foreign non-Chinese investors, this thesis is able to isolate each investor group's relative ability to impound firm-specific information into stock prices. I show that the cross-listed H-shares traded by foreign investors incorporate significantly more firm-specific information than their A-share counterparts traded by domestic Chinese investors. I find a similar pattern between H-shares and A-shares even after a 2007 regulatory change that allowed domestic Chinese investors to trade in the H-share market. This finding suggests that while institutional factors (e.g., stricter listing rules, stronger investor protection) can explain some of the benefits of cross-listing, foreign investors' ability to utilize firm-specific information plays a separate and distinct role in generating cross-listing benefits. The level of information improvement due to foreign investors depends on the quality of the cross-listed firm's corporate governance.

Download or read book Cross Listing Firm Specific Information and Corporate Governance written by Shan Li and published by . This book was released on 2014 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the impact of cross-listing on firm-specific information utilizing the unique features of the Chinese capital markets. By separating the trading activity of domestic Chinese investors from that of foreign non-Chinese investors, we are able to isolate each investor group's relative ability to impound firm-specific information into stock prices. We show that the cross-listed H-shares traded by foreign investors incorporate significantly more firm-specific information than their A-share counterparts traded by domestic Chinese investors. We find a similar pattern between H-shares and A-shares even after a 2007 regulatory change that allowed domestic Chinese investors to trade in the H-share market. This finding suggests that while institutional factors (e.g., stricter listing rules, stronger investor protection) can explain some of the benefits of cross-listing, foreign investors' ability to utilize firm-specific information plays a separate and distinct role in generating cross-listing benefits. The level of information improvement due to foreign investors depends on the quality of the cross-listed firm's corporate governance.

Download or read book Three Essays on Pricing and Volume Distributions of Cross listed Stocks written by Jing Wang and published by . This book was released on 2014 with total page 155 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This dissertation provides empirical evidences in global cross-listed stocks trading volume and pricing. The first essay documents the global trading volume distribution of cross-listed stocks and examines factors that make a host market competitive in attracting order flows from the counterpart domestic market. The results show that host markets are more successful in attracting trading volume when they have a higher information factor, have lower bid-ask spreads, provide better investor protection and information disclosure, share the common language or legal origin with the counterpart home markets and locate closer to the home market. The second essay investigates the market competitiveness among rival host markets based on a unique sample of global firms simultaneously cross-listed in multiple foreign countries. I present the global cross-listings and trading volume distributions cross host-home markets as well as over time, and provide robust evidences that host markets are more successful in attracting trading volume from other competing markets when they have lower bid-ask spreads, better legal protection, more market liquidity, higher level of financial development, and where the firms with longer listing history. Interesting, I consistently find that host countries with English common law origins are able to attract trading volume while French civil law origin host countries attract less trading activities. The third essay investigates the cross-listed stock price discovery process. I use synchronous trading data and the error correction model to find that prices on the home and the U.S. markets are co-integrated and mutually adjusting. The price adjustment in response to price disparity happens in both the home market and the U.S. (host) market. In most cases, domestic prices are dominant for the price discovery. However, I also observe a statistically significant amount of feedback from the U.S. markets. The greater the competition offered by the U.S. market, represented as larger U.S. proportion of trading volume, more informative U.S. share price, more liquidity, better legal protection and closer to the home market, the more price adjustment from domestic side toward the U.S. price.

Download or read book A Breakdown of the Valuation Effects of International Cross Listing written by Arturo Bris and published by . This book was released on 2019 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is well known that cross-listing domestic stocks in foreign exchanges has significant valuation effects on the listed company's shares. Using a sample of firms with dual shares, we explore the differential effects of cross-listing on prices and we are able to separate the different sources of the benefits of cross-listing. Our results show that even though the market segmentation and bonding effects are both statistically significant, the economic significance of segmentation is more than double that of bonding. Furthermore, we document an economically and statistically significant increasse in the liquidity of both share classes after the listing. Overall, our results explain why less and less firms are willing to list in the U.S.: Sarbanes Oxley has increased the cost of adopting better governance while its benefits are not substantial; and market segmentation has decreased significantly in the last years.

Download or read book International Cross Listing of Chinese Firms written by Liu, Lixian and published by IGI Global. This book was released on 2014-01-31 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt: While many nations are still struggling from the global financial crisis and regaining their financial security, investors are considering alternative options for investing their money; and the secure financial sector is China appears as a viable option. International Cross-Listing of Chinese Firms examines the successful techniques and strategies that Chinese companies are using within their financial practices. It highlights the foreign-based multinational enterprise theories related to the major international stock markets. By providing the latest theories and research, this book will be beneficial for business practitioners, researchers, and managers interested in the relationship between cross-listing and firm valuation of Chinese firms.

Download or read book Discussion of the empirical evidence regarding the merit of companies cross listing their shares on foreign equity markets written by Matthias Hilgert and published by GRIN Verlag. This book was released on 2005-05-02 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: very good (UK: grade A), University of Glasgow (Department of Accounting and Finance), course: International Financial Management, language: English, abstract: Some non-American companies benefit from a US-listing and others do not even cross-list in the US. Several empirical studies show that foreign companies, which are listed in the US, are worth more. However, less than one out of 10 large public non-American companies float their shares in the US (Doidge et al., 2004). Why is cross-listing beneficial to some companies and not to others? In 1997 more than 4,700 companies were internationally cross-listed. But, during the past several years this number decreased significantly by 50% to 2,300 (end of 2002) companies (Karolyi, 2004). Today more and more foreign companies acknowledge that they cannot cross-list in the US. Moreover, some companies admit that they are no longer even willing to cross-list, because of the high costs and strict requirements (Economist, 2005). Still, there must be a benefit for some to cross-list. A number of studies point out that the benefits regarding cross-listing include a lower cost of capital, access to foreign capital markets, an extended global shareholder base, greater liquidity in the trading of shares, publicity, visibility and prestige. On the other hand, these companies face costs, which might erode the benefits. Typical costs associated with a US-listing are the SECreporting, reconciliation of financial statements with home and foreign standards, direct listing costs, compliance requirements, exposure to legal liabilities, taxes and various trading frictions as well as investment banking fees (Karolyi, 2004 and Doidge et al., 2004). This essay aims to examine the empirical evidence regarding the merit of cross-listing shares on foreign equity markets, especially listing shares in the US. First, it critically reviews the conventional wisdom. Secondly, it examines the new approach of the cross-listing premium. Finally, it ends with a summary of this project and my own opinions.

Download or read book The Value of Information in Cross Listing written by Arturo Bris and published by . This book was released on 2011 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: We exploit a unique feature of the organizational structure of the London Stock Exchange that allows for direct tests of the market segmentation and liquidity hypotheses against the information based hypotheses of cross-listing. We identify a sample of international firms that are admitted to trading on London's SEAQ-I platform without their involvement. We estimate the valuation effects of this multi-market trading event and compare them to those enjoyed by firms that pursue a London Stock Exchange cross-listing. A cross-sectional abnormal returns analysis documents strong evidence in support of significant information driven valuation benefits and limited support for the effects of market segmentation and liquidity. An analysis of the firms' home market price volatility corroborates the results.