Disclosure and cross‐listing: evidence from Asia‐Pacific firms

Purpose - The purpose of this paper is to examine whether both country disclosure environment and firm‐level disclosures are associated with cross‐listing in the USA or London or otherwise. Design/methodology/approach - The authors test the association using a sample of Asia‐Pacific firms covered in the Standard and Poor's, 2001/2002 disclosure survey, capturing the country‐level disclosure using the Center for International Financial Analysis and Research (CIFAR) score. The firm‐level disclosure is measured using the S&P disclosure score. The authors conduct a logistic regression analysis and a two‐stage least squares analysis to examine whether the outcome, cross‐listing or not, is associated with the country disclosure environment and firm‐level disclosures. Findings - The authors find that Asia‐Pacific firms from weak disclosure environments and having higher firm‐level disclosure scores are more likely to seek listing in the USA. Further, the paper provides initial evidence that these Asia‐Pacific firms are as likely to seek listing in London as in the USA. No significant difference was found in S&P scores between US and London cross‐listings after controlling for the effects of other variables. This suggests that firms that cross‐list in London present similar disclosure levels to firms that cross‐list in the USA. Originality/value - The paper's findings contribute to the cross‐listing literature on disclosure by showing that the interaction between firm‐level disclosure and country‐level disclosure has an impact on whether a firm cross‐lists in the USA/London or not. The authors' comparison of US cross‐listings versus London cross‐listings provides the first evidence that disclosures of US and London cross‐listings are not significantly different.