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Cross-Country Competitive Effects of Cross-Listings

Author

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  • Sergei Sarkissian
  • Yan Wang

Abstract

We study competitive effects of foreign listings on U.S. stock exchanges over a 50-year period and show that U.S. rival firms respond strongly negatively (weakly positively) to foreign listings (delistings). The performance decline of U.S. firms is related to the competitive advantages that foreign firms receive from their cross-listings, such as stronger financial benefits, higher growth prospects, and better visibility, rather than market or industry valuation timing or existing market competition. This decline is especially pronounced when cross-listings come from proximate or developed markets. Our findings highlight an important role of international markets in influencing the performance of U.S. firms.Received February 19, 2019; editorial decision September 18, 2019 by Editor Isil Erel. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Suggested Citation

  • Sergei Sarkissian & Yan Wang, 2020. "Cross-Country Competitive Effects of Cross-Listings," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 9(1), pages 116-164.
    • Handle: RePEc:oup:rcorpf:v:9:y:2020:i:1:p:116-164.
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    File URL: http://hdl.handle.net/10.1093/rcfs/cfz008
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    More about this item

    Keywords

    D22; F30; G14; G15; G32; M41;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F30 - International Economics - - International Finance - - - General
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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