Does Cross-Listing in the US Foster Mergers and Acquisitions and Increase Target Shareholder Wealth?
AbstractWe examine the role of cross-listing in alleviating domestic market constraint and facilitating cross-border mergers and acquisitions. Cross-listing appears to strengthen the bargaining power of target firms, allowing them to extract higher takeover premiums relative to their non-cross-listed peers. Moreover, shareholders of Sarbanes-Oxley-compliant targets seem to benefit from a higher premium. We also find that cross-listed firms are more likely to be acquisition targets. This evidence is consistent with the idea that cross-listing increases firms’ attractiveness and visibility on the market for corporate control. Our results are robust to various specifications and to the self-selection bias arising from the decision to cross-list.
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Bibliographic InfoPaper provided by CIRPEE in its series Cahiers de recherche with number 1023.
Date of creation: 2010
Date of revision:
Cross-listing; mergers & acquisitions; governance; Sarbanes-Oxley Act;
Find related papers by JEL classification:
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- K00 - Law and Economics - - General - - - General (including Data Sources and Description)
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- Rhodes-Kropf, Matthew & Robinson, David T. & Viswanathan, S., 2005. "Valuation waves and merger activity: The empirical evidence," Journal of Financial Economics, Elsevier, Elsevier, vol. 77(3), pages 561-603, September.
- Matthew Rhodes-Kropf & S. Viswanathan, 2004. "Market Valuation and Merger Waves," Journal of Finance, American Finance Association, American Finance Association, vol. 59(6), pages 2685-2718, December.
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