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Investor Protection, Investment Efficiency and Value: The Case of Cross-Listed Firms

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  • Chinmoy Ghosh
  • Fan He

Abstract

type="main"> We examine the impact of improved investor protection due to cross-listing on foreign firms’ investment decisions and firm value. While we find that cross-listing increases firms’ capital expenditures and mergers and acquisitions activities, cross-listed firms also invest more in research and development, make better acquisition decisions, and have higher profitability compared to non-cross-listed firms. Moreover, cross-listing is associated with better cash utilization by foreign firms for investments. These improvements in investments and cash utilization are more pronounced for firms cross-listed on US exchanges and for firms from countries with weak investor protection laws.

Suggested Citation

  • Chinmoy Ghosh & Fan He, 2015. "Investor Protection, Investment Efficiency and Value: The Case of Cross-Listed Firms," Financial Management, Financial Management Association International, vol. 44(3), pages 499-546, September.
    • Handle: RePEc:bla:finmgt:v:44:y:2015:i:3:p:499-546
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