The Dark Side of International Cross-Listing: Effects on Rival Firms at Home
AbstractWe analyze the stock price impact of firms’ U.S. cross-listing on home-market rival firms. Using an empirical event study approach we find negative cumulative average abnormal returns for the rival firms. The evidence suggests that the dominant effect is that investors see rivals as at a relative disadvantage to the listing firm. As firms cross-list in the US and commit to the increased disclosure and investor protection associated with the US listing, they are better able to take advantage of growth opportunities relative to their non cross-listing counterparts, and this results in negative spillover effects on rival firms.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2174.
Date of creation: 2007
Date of revision:
cross-listings; rival firms; growth opportunities;
Other versions of this item:
- Michael Melvin & Magali Valero, 2009. "The Dark Side of International Cross-Listing: Effects on Rival Firms at Home," European Financial Management, European Financial Management Association, vol. 15(1), pages 66-91.
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
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