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The Geography of Equity Listing: Why Do Companies List Abroad?

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  • Pagano, Marco
  • Röell, Ailsa A
  • Zechner, Josef

Abstract

This Paper documents the aggregate trends in the foreign listings of companies and analyses both their distinctive pre-listing characteristics and their post-listing performance relative to other companies. In the 1986-97 interval, many European companies listed abroad, but did so mainly on US exchanges. At the same time, the number of US companies listed in Europe decreased. The cross-listings of European companies appear to have sharply different motivations and consequences depending on whether they cross-list in the United States or within Europe. In the first case, companies pursue a strategy of rapid expansion and large equity issues after the listing. They rely increasingly on export markets and tend to belong to high-tech industries. In the second case, companies do not grow more than the control group, and increase their leverage after the cross-listing. The only features common to all cross-listing companies are their large size and their tendency to be recently privatized companies.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2681.

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Date of creation: Jan 2001
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Handle: RePEc:cpr:ceprdp:2681

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Keywords: Cross-Listings; Geography; Going Public; Initial Public Offerings;

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