The costs of foreign single listing |
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Authors: | Peixin Li |
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Institution: | School of Business, Central University of Finance and Economics, Beijing, China |
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Abstract: | A significant number of firms conduct their initial public offerings in a foreign market without a domestic listing; this is known as a foreign single listing. The existing literature has mainly focused on examining cross-listings – where firms are listed in both the domestic market and one or more foreign markets – with little attention to foreign single listings. This study examines the costs of foreign single listings. Using a sample of Chinese firms, we show that – on average – the stocks of foreign single-listed firms are undervalued by around 20–30% relative to cross-listed firms. The results are robust in both panel regressions and in a natural experiment analysis. Our findings have strong implications for firms which may consider listing overseas. |
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Keywords: | Foreign single listing cross-listing valuation information asymmetry |
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