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The effect of cross-listing on the environmental, social, and governance performance of firms

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  • Del Bosco, Barbara
  • Misani, Nicola

Abstract

We propose that cross-listing is associated with better environmental, social, and governance (ESG) performance, because cross-listed firms adopt ESG practices to mitigate the liability of foreignness (LOF) in foreign financial markets. Institutionalization processes have made ESG practices important for managing challenges associated with the LOF. With tests involving the S&P Global 1200 index, we show that cross-listing improves corporate social responsibility (CSR; i.e., social and environmental dimensions) but not corporate governance. The effects of cross-listing on CSR also depend on investor protection regimes of listing destinations: Stronger regimes correspond with poorer CSR performance, suggesting that they limit managerial discretion.

Suggested Citation

  • Del Bosco, Barbara & Misani, Nicola, 2016. "The effect of cross-listing on the environmental, social, and governance performance of firms," Journal of World Business, Elsevier, vol. 51(6), pages 977-990.
    • Handle: RePEc:eee:worbus:v:51:y:2016:i:6:p:977-990
    DOI: 10.1016/j.jwb.2016.08.002
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