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What drives delistings of foreign firms from U.S. Exchanges?

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  • Chaplinsky, Susan
  • Ramchand, Latha

Abstract

We examine time dependency in the factors motivating delistings of foreign firms from major U.S. Exchanges over the period 1962–2006. For firms listing before Sarbanes-Oxley (SOX), we find that governance has no significant effect on delisting but after SOX, it becomes one of the main forces driving delisting. For firms whose delisting decision is most likely attributable to SOX, we find they realize low benefits from listing – they originate from countries with strong home market governance, and from listing onward realize low trading volume, analyst coverage, and make little use of capital raising. Our results suggest that SOX has had a large influence on the benefits seek from a U.S. listing, leading firms from well governed countries and low capital raising needs to delist.

Suggested Citation

  • Chaplinsky, Susan & Ramchand, Latha, 2012. "What drives delistings of foreign firms from U.S. Exchanges?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(5), pages 1126-1148.
  • Handle: RePEc:eee:intfin:v:22:y:2012:i:5:p:1126-1148
    DOI: 10.1016/j.intfin.2012.06.003
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    References listed on IDEAS

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    Cited by:

    1. Gilberto Loureiro & Sónia Silva, "undated". "Post-Operating Performance of Cross-Delisted Firms From U.S. Stock Exchanges," NIPE Working Papers 17/2015, NIPE - Universidade do Minho.
    2. Gilberto Loureiro & Sónia Silva, "undated". "Cross-Delisting, Financial Constraints and Investment Sensitivities," NIPE Working Papers 15/2015, NIPE - Universidade do Minho.
    3. Del Bosco, Barbara & Misani, Nicola, 2016. "The effect of cross-listing on the environmental, social, and governance performance of firms," Journal of World Business, Elsevier, vol. 51(6), pages 977-990.

    More about this item

    Keywords

    International finance; Delistings; Cross-listings; Governance; Sarbanes-Oxley;

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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