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Corporate governance, agency problems and international cross-listings: A defense of the bonding hypothesis

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  • Karolyi, G. Andrew
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    Abstract

    Why firms from around the world seek to cross-list their shares on overseas exchanges has intrigued scholars during the past two decades. A general dissatisfaction with the conventional wisdom about investment barriers segmenting global investors and how cross-listings overcome those barriers cleared the way for newer wisdom about informational problems and agency conflicts, and how firms could overcome weaknesses in corporate governance by listing on, and thus “bonding” to, overseas markets with stronger regulatory oversight, stringent reporting and disclosure requirements and investor protections. Critics have challenged the viability of the bonding hypothesis, which I answer in this review.

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    Bibliographic Info

    Article provided by Elsevier in its journal Emerging Markets Review.

    Volume (Year): 13 (2012)
    Issue (Month): 4 ()
    Pages: 516-547

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    Handle: RePEc:eee:ememar:v:13:y:2012:i:4:p:516-547

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    Web page: http://www.elsevier.com/locate/inca/620356

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    Keywords: Cross-listing; Stocks; Bonding; International financial markets;

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    Cited by:
    1. Gilberto Loureiro & Alvaro G. Taboada, 2013. "Equity Offerings Abroad and the adoption of IFRS: A test of the Capital Markets Liability of Foreignness," NIPE Working Papers 21/2013, NIPE - Universidade do Minho.
    2. Doidge, Craig & Karolyi, G. Andrew & Stulz, René M., 2013. "The U.S. left behind? Financial globalization and the rise of IPOs outside the U.S," Journal of Financial Economics, Elsevier, vol. 110(3), pages 546-573.
    3. Claessens, Stijn & Yurtoglu, B. Burcin, 2013. "Corporate governance in emerging markets: A survey," Emerging Markets Review, Elsevier, vol. 15(C), pages 1-33.

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