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Ownership, Foreign Listings, and Market Valuation


  • Kaul, Aditya
  • Mehrotra, Vikas
  • Phillips, Blake


We study changes in U.S. institutional ownership and its effects for 83 new listings of Canadian equities on U.S. exchanges. While institutional holdings increase starting four quarters before cross-listing, there is a pronounced spike in the listing quarter. This is consistent with foreign listing being essential to attract major foreign investors. Sorting stocks on the change in institutional ownership associated with cross-listing, we find that stocks with the largest increase in ownership experience (a) permanent increases in their prices; (b) the largest increase in comovement with the U.S. equity index; and (c) the largest increase in local liquidity. These results suggest that ownership plays a critical part in driving price and liquidity changes around cross-listings and in inducing comovement with local stocks.

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  • Kaul, Aditya & Mehrotra, Vikas & Phillips, Blake, 2006. "Ownership, Foreign Listings, and Market Valuation," CEI Working Paper Series 2005-13, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hitcei:2005-13

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    1. Alexander, Gordon J. & Eun, Cheol S. & Janakiramanan, S., 1988. "International Listings and Stock Returns: Some Empirical Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 23(02), pages 135-151, June.
    2. Ahearne, Alan G. & Griever, William L. & Warnock, Francis E., 2004. "Information costs and home bias: an analysis of US holdings of foreign equities," Journal of International Economics, Elsevier, vol. 62(2), pages 313-336, March.
    3. Jayaraman, Narayanan & Shastri, Kuldeep & Tandon, Kishore, 1993. "The impact of international cross listings on risk and return : The evidence from American depository receipts," Journal of Banking & Finance, Elsevier, vol. 17(1), pages 91-103, February.
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