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The effects of regional cross listing on firm value and financial performance: drawing lessons for Lesotho

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  • Moeti Damane

Abstract

This research determines the effects of regional cross listing on firm value and financial performance and draws policy lessons for Lesotho. Using event study methodology, financial ratio analysis and a regional case study of two Sub-Saharan African firms that cross listed on the Johannesburg Stock Exchange in 2015 and 2016, the results of the study reveal that cross listing leads to increased firm liquidity coupled with positive and statistically significant abnormal returns. These findings confirm the legal bonding theory, the signalling theory, the investor recognition theory and the liquidity theory. It is recommended that the empirical findings of this study be used by authorities to draw locally incorporated firms' attention to the potential benefits of cross listing. This should be done in conjunction with initiatives that identify and unlock any bottlenecks that act as deterrents for company listing on the Maseru Securities Market.

Suggested Citation

  • Moeti Damane, 2019. "The effects of regional cross listing on firm value and financial performance: drawing lessons for Lesotho," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 6(3), pages 201-235.
    • Handle: RePEc:ids:ajaafi:v:6:y:2019:i:3:p:201-235
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    Cited by:

    1. Damane Moeti, 2022. "Topic Classification of Central Bank Monetary Policy Statements: Evidence from Latent Dirichlet Allocation in Lesotho," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 10(1), pages 199-227, September.
    2. Moeti Damane, 2022. "Investigating the determinants of commercial bank interest rate spreads in Lesotho: Evidence from autoregressive distributed lag (ARDL) and non‐linear ARDL approaches," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4256-4278, October.

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