Does cross-listing signal quality
The literature on cross-listing generally conveys the impression that cross-listing is good news about a firm. This paper focuses on returns following cross-listing where evidence of positive results from cross-listing is mixed. considering 81 Australian firms, we find that cross-listed firms are...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
Elsevier Ltd
2006
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| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.11937/22032 |
| Summary: | The literature on cross-listing generally conveys the impression that cross-listing is good news about a firm. This paper focuses on returns following cross-listing where evidence of positive results from cross-listing is mixed. considering 81 Australian firms, we find that cross-listed firms are less profitable with higher debt levels prior to cross-listing and that they achieve significant negative abnormal returns in the three years following cross-listing. This result holds even for firms seeking the benefits of “bonding” to US disclosure requirements by cross-listing in the more regulated US markets. Our study suggests cross-listing is not an unambiguous positive signal about a firm. |
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