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 The Impact of International Cross listings on Firm Value After the Sarbanes Oxley Act written by and published by . This book was released on 2012 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Cross listing and firm value written by Gang Ji and published by . This book was released on 2005 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the economic consequences of cross-listing on the Chinese stock market. We argue that by adopting a higher disclosure standard through cross- listing firms voluntarily commit themselves to reducing information asymmetry. As a result, cross-listed firms are able to benefit from growth opportunities with less appropriated cash flow and lower cost of capital. The empirical evidence shows that cross-listed firms indeed command higher valuations than their non-cross-listed counterparts, after controlling for certain firm-specific attributes. This lends support to the corporate governance hypothesis of cross-listing on the Chinese stock market. The study also argues that an overall upgrad-ing of accounting standards cannot substitute for the cross-listing mechanism.

Download or read book The Impact of Cross listing on Firm Value written by Meichen Wang and published by . This book was released on 2011 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Cross Listing and Firm Value Corporate Governance or Market Segmentation An Empirical Study of the Stock Market written by Andy G. Ji and published by . This book was released on 2007 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the economic consequences of cross-listing on the Chinese stock market. We argue that by adopting a higher disclosure standard through cross-listing firms voluntarily commit themselves to reducing information asymmetry. As a result, cross-listed firms are able to benefit from growth opportunities with less appropriated cash flow and lower cost of capital. The empirical evidence shows that cross-listed firms indeed command higher valuations than their non-cross-listed counterparts, after controlling for certain firm-specific attributes. This lends support to the corporate governance hypothesis of cross-listing on the Chinese stock market. The study also argues that an overall upgrading of accounting standards cannot substitute for the cross-listing mechanism.

Download or read book The Impact of the Regional Cross listing of Stocks on Firm Value in Sub Saharan Africa written by Olatundun Janet Adelegan and published by . This book was released on 2009 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Effects of Cross listing on Valuation and Firm Performance MBA Thesis a Ccompanied by a CD ROM written by and published by . This book was released on 2014 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main objective of this study was to examine the effects of regional cross-listing on firm value and performance on Kenyan firms. The specific research objectives for this study were: (i) to determine the effect of cross-listing on valuation; (ii) to determine the effect of cross-listing on profitability and growth; (iii) to determine the effect of cross-listing on liquidity and leverage and; (iv) to determine the effect of cross-listing on operational performance. The scope of the study focused on 5 cross-listed firms whose primary listing is the NSE. Thus, conducting a census the study analyzed data from firms? financial statements and the NSE daily market averages and analyzed the firms? value, profitability and growth, liquidity and leverage and, operational performance to examine the differences prior and subsequent to listing. The study conducted a time series analysis, taking into consideration the independence of the variables are concerned with a time series data set, thus sought to examine the evolution of the variables over time using data spanning seven years i.e. three years before cross-listing, the year of cross-listing and three years after cross-listing. The study further subjected the results to a univariate analysis in order to examine the significance of the findings using the paired t-test for the firms Tobin?s Q, liquidity and leverage, profitability and growth and operational performance. Additionally, the findings were also subjected to a correlation analysis to measure the degree of relationship between the variables under study. The results on firm value show that on average the firm value decreased after cross-listing but the results had no statistically significant difference from before and after cross-listing. Tobin?s Q and profitability had a strong correlation indicating that the change in firm value has a strong effect to the changes in the firm profitability. The results from the study on Liquidity and Leverage, using a before and after comparison from the paired t-test revealed that on average the liquidity of the firm increased while as leverage decreased. Additionally, the study also revealed that leverage and liquidity had a moderately negative correlation. Depending on the firm, profitability and growth varied and thus there was no consistent trend evident in the study. However, a before and after comparison of the variables yielded that despite the increase in profitability and growth of the firms, the results had no significant difference. The time series analysis yielded that operational performance of majority of the cross-listed firms? motive by market incentive to cross-list, increased. Jubilee Insurance was the only firm that reported an increase after cross-listing. A before and after comparison yielded that there was a decrease in operational performance but there was no statistical significant difference in the results. Additionally, liquidity and total assets had a weak positive correlation indicating that the changes in leverage does not weakly/does not correlate with the changes in total assets. The study recommends that for firms to sustain their improved firm value and financial performance post-listing, firms should not only comply with the new regulations that they have willingly subjected themselves to but, to take the extra mile to improve corporate governance, improve information disclosure exceeding the bare minimum and creating more value for shareholders.

Download or read book Cross Listing and Firm Value Corporate Governance Or Market Segmentation An Empirical Study of the Stock Market BOFIT Discussion Papers 14 2005 written by Gang Ji and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 Firm Value the Sarbanes Oxley Act and Cross Listing in the US Germany and Hong Kong Destinations written by Marcelo Bianconi and published by . This book was released on 2011 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents empirical evidence on the effects of the Sarbanes-Oxley Act of 2002 on the value of firms and on the cross-listing choice of firms destined to three major markets in North America, Asia and Europe. We use dynamic panel data methods and treatment effects methods to find that Sarbanes-Oxley has had a negative impact on the value of firms worldwide. Our evidence indicates that Sox may have segmented markets, with fewer and more valuable firms seeking the more stringent US market; but many more lower valued firms destined to Hong Kong and Germany seeking potential signaling benefits of crosslisting.

Download or read book Does the Choice of Listing Level Matter Evidence from Foreign Firms Cross listing in the United States written by Hicham Hadni and published by . This book was released on 2007 with total page 139 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study makes an important contribution to the economic and finance literature on value analysis of foreign firms cross-listing in the United States. Doidge, Karolyi and Stulz (2003) show that, at the end of 1997, foreign firms with shares cross-listed in U.S. financial markets had Tobin's q ratios significantly higher than those of firms from the same country that were not listed in the United States. I consider in a detailed value analysis the three main levels of American Depositary Receipt (ADR) listings and analyze the impact of upgrading the listing level on firms' values. I extend the work of Doidge, Karolyi and Stulz (2003) to control for listing levels as well as additional country and firm characteristics. I find significant evidence that cross-listing firms experience (i) an average increase in value of 26 percent when they upgrade their listing level from level I to level II, and (ii) an average increase in value of 38 percent when they upgrade their listing level from level II and level III.

Download or read book Competition and Co Operation Among Exchanges written by Thomas J. Chemmanur and published by . This book was released on 2012 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze firms' choice between exchanges to list their equity (including multiple listings), and exchanges' choice of listing standards for firms which apply for listing, in an environment of competition and co-operation among exchanges. We model an equity market characterized by asymmetric information, where outsiders can reduce their informational disadvantage relative to insiders by producing (noisy) information about firms at a cost. Exchanges are populated by two kinds of investors: sophisticated investors, with a cost advantage in producing information (low-cost investors), and ordinary investors, without such a cost-advantage (high-cost investors); the proportions of these two kinds of investors vary across exchanges. While firms are short-lived agents, exchanges are long-lived, value-maximizing agents, whose stringency in their listing and disclosure standards evolve over time. Exchanges also use their listing standards as a tool in competing with other exchanges for listings by firms. However, outsiders can partially infer the rigor of an exchange's listing policy by studying the subsequent performance of firms which have obtained listing there. The listing standards chosen by an exchange therefore affects its reputation. The listing choices of firms between exchanges, the valuation effects of listings on firm equity, and exchanges' listing standards emerge endogenously in equilibrium. Our model has implications for: the relationship between firm characteristics and the benefits from cross (and dual) listing; the price effects of cross listings; the relationship between cross listing and financial analyst following; the relationship between an exchange's reputation and its listing standards; the impact of competition on an exchange's listing standard; the impact of an alliance between exchanges on the listing standards of the allied exchange and of exchanges competing with it; and for the optimal regulation of exchanges.

Download or read book Why Do U S Cross listings Matter written by John Ammer and published by . This book was released on 2008 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the underlying determinants of home bias using a comprehensive sample of U.S. investor holdings of foreign stocks. We document that U.S. cross-listings are economically important, as U.S. ownership in a foreign firm roughly doubles upon cross-listing in the United States. We explore the cross-sectional variation in this "cross-listing effect" and show that increases in U.S. investment are largest in firms from weak accounting backgrounds and in firms that are otherwise informationally opaque, indicating that U.S. investors value the improvements in disclosure associated with cross-listing. We confirm that relative equity valuations rise for cross-listed stocks, and provide evidence suggesting that valuation increases are due in part to increases in U.S. shareholder demand and in part to the fact that the equities become more attractive to non-U.S. shareholders.

Download or read book Adrs Analysts and Accuracy written by Mark H. Lang and published by . This book was released on 2012 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the relation between cross listing in the U.S., with its resulting commitment to increased disclosure, and the information environment of non-U.S. firms. We find that firms that cross-list on U.S. exchanges have greater analyst coverage and increased forecast accuracy relative to firms that are not cross listed. A time-series analysis shows that the change in analyst coverage and forecast accuracy occurs around cross listing. We also document that firms that have more analyst coverage and higher forecast accuracy have a higher valuation. Further, the change in firm value around cross listing is correlated with changes in the firm's information environment. Our findings support the hypothesis that cross-listed firms have better information environments, which are associated with higher market valuations.

Download or read book The Economic Consequences of Increased Disclosure written by Haiyan Zhou and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we investigate the impact of cross-listings on information asymmetry risk, the cost of capital and firm value of a group of cross-listed Chinese companies. Our paper is the first to examine the effect of cross-listing on information asymmetry risk. Because cross-listed firms are subject to increased disclosure requirements, increased regulatory scrutiny and increased legal liability, we propose that Chinese cross-listed firms have lower information asymmetry risk, lower cost of capital and higher firm value than their non-cross-listed counterparts. We find in both univariate and multivariate tests that cross-listed firms enjoyed lower information asymmetry risk in the domestic market compared with the non-cross-listed firms. We also find that cross-listed firms have lower cost of capital in the cross-listing market than non-cross-listed firms in the domestic markets. Finally, we find that cross-listed firms are associated with higher firm value as measured by Tobin's Q. These results have implications for international investors and companies seeking cross-listing opportunities.

Download or read book Cost of Capital Effects and Changes in Growth Expectations Around U S Cross Listings written by Luzi Hail and published by . This book was released on 2011 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether cross-listing in the U.S. reduces foreign firms' costs of capital. While prior studies show that U.S. cross-listings are associated with substantial increases in firm value, the sources of these valuation effects are not well understood. We estimate cost of capital effects implied by market prices and analyst forecasts, which accounts for changes in growth expectations around cross-listings. We find strong evidence that firms with cross-listings on U.S. exchanges experience a significant decrease in their cost of capital between 70 to 120 basis points. These effects are sustained and still present after the passage of the Sarbanes-Oxley Act. Consistent with the bonding hypothesis, we find smaller cost of capital reductions for firms that cross-list in the over-the-counter market and for exchange-listed firms from countries with stronger home-country institutions. For exchange-traded cross-listings, the reduction in cost of capital accounts for more than half of the increase in value around cross-listings, whereas for the other types of cross-listings the valuation effects are primarily attributable to contemporaneous revisions in growth expectations.

Download or read book Has New York Become Less Competitive in Global Markets Evaluating Foreign Listing Choices over Time written by Craig Doidge and published by . This book was released on 2010 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the determinants and consequences of cross-listings on the New York and London stock exchanges from 1990 to 2005. This investigation enables us to evaluate the relative benefits of New York and London exchange listings and to assess whether these relative benefits have changed over time, perhaps as a result of the passage of the Sarbanes-Oxley Act of Congress (SOX) in 2002. We find that cross-listings have been falling on U.S. exchanges as well as on the Main Market in London. This decline in cross-listings is explained by changes in firm characteristics rather than by changes in the benefits of cross-listing. We show that, after controlling for firm characteristics, there is no deficit in cross-listing counts on U.S. exchanges related to SOX. Investigating the valuation differential between listed and nonlisted firms (the quot;cross-listing premiumquot;) from 1990 to 2005, we find that there is a significant premium for U.S. exchange listings every year, that the premium has not fallen significantly in recent years, that it persists when allowing for unobservable firm characteristics, and that there is a permanent premium in event time. In contrast, there is no premium for listings on London's Main Market for any year. Crosslisting in the U.S. leads firms to increase their capital-raising activity at home and abroad while a London listing has no such impact. Our evidence is consistent with the theory that an exchange listing in New York has unique governance benefits for foreign firms. These benefits have not been seriously eroded by SOX and cannot be replicated through a London listing.