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Foreign listing pricing effects. The case of emerging economies

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  • Joanna Adamska-Mieruszewska

    (University of Gdansk, Faculty of Economics)

  • Urszula Mrzygłód

    (University of Gdansk, Faculty of Economics)

Abstract

Together with global financial integration processes, companies from emerging markets gained access to foreign stock exchanges also through the issue of the depositary receipts. The aim of this paper is to examine the price reaction on the domestic stock exchange in response to cross-listing on foreign stock markets. To do so, we employ the event study method and investigate the pricing effects of 272 depositary receipts listings of companies from 12 emerging economies. Based on the non- -parametric tests, we found that issuing depositary receipts generates statistically significant negative abnormal returns on the domestic stock market two days before the listing day. On the contrary, the results of the parametric test revealed negative but non-significant abnormal returns during the pre--listing period. We interpret our findings as evidence of non-positive market reaction and decreasing significance of the cross-listing decisions for the domestic shareholders.

Suggested Citation

  • Joanna Adamska-Mieruszewska & Urszula Mrzygłód, 2020. "Foreign listing pricing effects. The case of emerging economies," Bank i Kredyt, Narodowy Bank Polski, vol. 51(4), pages 367-382.
    • Handle: RePEc:nbp:nbpbik:v:51:y:2020:i:4:p:367-382
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    References listed on IDEAS

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    1. Awadh Saeed Bin-Dohry & Hanita Kadir Shahar & Sharmilawati Sabki, 2023. "Destination choice of the dual listing decision: The case ASEAN-5 firms," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2233773-223, June.

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    More about this item

    Keywords

    cross-listing; emerging economies; event study;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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