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Does Cross-Listing in the US Foster Mergers and Acquisitions and Increase Target Shareholder Wealth?

Author

Listed:
  • Jean-Claude Cosset
  • Siham Meknassi

Abstract

We examine the role of cross-listing in alleviating domestic market constraint and facilitating cross-border mergers and acquisitions. Cross-listing appears to strengthen the bargaining power of target firms, allowing them to extract higher takeover premiums relative to their non-cross-listed peers. Moreover, shareholders of Sarbanes-Oxley-compliant targets seem to benefit from a higher premium. We also find that cross-listed firms are more likely to be acquisition targets. This evidence is consistent with the idea that cross-listing increases firms’ attractiveness and visibility on the market for corporate control. Our results are robust to various specifications and to the self-selection bias arising from the decision to cross-list.

Suggested Citation

  • Jean-Claude Cosset & Siham Meknassi, 2010. "Does Cross-Listing in the US Foster Mergers and Acquisitions and Increase Target Shareholder Wealth?," Cahiers de recherche 1023, CIRPEE.
    • Handle: RePEc:lvl:lacicr:1023
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)

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