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Evolution of control of cross-listed companies

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  • Wissam Abdallah
  • Marc Goergen

Abstract

There are two theories on the determinants of the control structure of the firm. The first theory postulates that the control structure is determined by company-specific characteristics. The second theory emphasises the importance of institutional characteristics in shaping this structure. In this paper, we test the validity of both theories in the context of a cross-listing, which causes a change to the company's legal environment. We find that the initial control structure, risk and size determine the control structure post cross-listing and that cross-listing on better quality markets facilitates the evolution of control towards more dispersed control. To conclude, company characteristics have a greater impact than country characteristics on the company's decision to cross-list and are also better at explaining the change in the control structure post cross-listing.

Suggested Citation

  • Wissam Abdallah & Marc Goergen, 2016. "Evolution of control of cross-listed companies," The European Journal of Finance, Taylor & Francis Journals, vol. 22(15), pages 1507-1533, December.
    • Handle: RePEc:taf:eurjfi:v:22:y:2016:i:15:p:1507-1533
    DOI: 10.1080/1351847X.2014.1003312
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    Cited by:

    1. Zijian Cheng & Charles P. Cullinan & Zhangxin (Frank) Liu & Junrui Zhang, 2021. "Cross‐listings and dividend size and stability: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 415-465, March.
    2. Abdallah, Abed AL-Nasser & Abdallah, Wissam, 2019. "Does cross-listing in the US improve investment efficiency? Evidence from UK firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 72(C), pages 215-231.

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