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How important is the home market for cross - listed biotech companies?

Author

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  • Theodore Panagiotidis

    (Department of Economics, University of Macedonia, Greece)

  • Pavlos Tsiokas

Abstract

This study investigates five German biotechnology firms cross-listed on XETRA and NASDAQ. By employing high-frequency data, we estimate both bivariate and trivariate vector error correction models—the latter explicitly accounting for exchange rate dynamics—to assess which market, domestic or U.S., leads in price discovery. The results suggest that XETRA plays a dominant role for larger firms, whereas smaller firms are more influenced by NASDAQ. Simulations show that bivariate models—common in the literature— yield biased results under volatile exchange rate conditions, whereas trivariate models produce more robust estimates. Finally, exchange rate shocks affect NASDAQ and XETRA differently.

Suggested Citation

  • Theodore Panagiotidis & Pavlos Tsiokas, 2025. "How important is the home market for cross - listed biotech companies?," Working Paper series 25-07, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:25-07
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    Cited by:

    1. Jiang, Chun & Chang, Tsangyao & Li, Xiao-Lin, 2015. "Money growth and inflation in China: New evidence from a wavelet analysis," International Review of Economics & Finance, Elsevier, vol. 35(C), pages 249-261.
    2. Kulaksizoglu, Tamer & Kulaksizoglu, Sebnem, 2009. "The U.S. Excess Money Growth and Inflation Relation in the Long-Run: A Nonlinear Analysis," MPRA Paper 23780, University Library of Munich, Germany.

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    • G1 - Financial Economics - - General Financial Markets

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