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Cross-listing, innovation and the role of nation-level institutions

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  • Do, Trung K.

Abstract

We analyze the relationship between cross-listing and innovation using a sample of firms from 40 countries spanning 1980–2016. We measure innovation through both the number of patents granted and citations received. Our results reveal a positive association between cross-listing and innovation, with this effect being more pronounced for firms from countries with poor legal environments and less developed financial systems. Overall, our findings align with bonding theory, suggesting that managers of cross-listed firms seek to bind themselves by adhering to the high legal and regulatory standards demanded by U.S. markets.

Suggested Citation

  • Do, Trung K., 2025. "Cross-listing, innovation and the role of nation-level institutions," Journal of Financial Stability, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:finsta:v:80:y:2025:i:c:s1572308925000865
    DOI: 10.1016/j.jfs.2025.101457
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    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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