Controlling shareholders and market timing: Evidence from cross-listing events |
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| Affiliation: | 1. UAE University, College of Business & Economics, United Arab Emirates;2. College of Business Administration, King Saud University, Saudi Arabia;3. Department of Finance, Audit and Accounting Champagne School of Management (Groupe ESC Troyes), France IRG, Université Paris Est Créteil, France;1. Department of Accounting, Beijing Technology and Business University, Beijing, China;2. College of Management, University of Massachusetts-Boston, 100 Morrissey Blvd., Boston, MA 02125, USA;3. Department of Management, China Youth Politics College, Beijing, China;1. School of Finance and Business, Shanghai Normal University, Shanghai 200234, China;2. Department of Finance, Financial Planning, and Insurance, David Nazarian College of Business and Economics, California State University, Northridge, CA 91330-8379, USA;1. University of South Dakota, Department of Accounting & Finance, Beacom School of Business, 414 East Clark Street, Vermillion, SD 57069, United States of America;2. University of Texas Rio Grande Valley, Department of Economics & Finance, Robert C. Vackar College of Business & Entrepreneurship, 1201 W. University Drive, Edinburg, TX 78539, United States of America;3. East Carolina University, Department of Finance, College of Business, 1001 East 5th Street, Greenville, NC 27858, United States of America |
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| Abstract: | We find partial support for a permanent increase in firm value following U.S. cross-listings. Cross-listed firms with capital-raising intentions on U.S. exchanges and firms cross-listing after the Sarbanes-Oxley Act exhibit an increase in firm value. Yet, investors are worse off in the long run when owning insider-controlled cross-listings. Compared to non-insider-owned cross-listings, insider-owned firms have a greater rise in value around the cross-listing year but also a larger decline in the post-cross-listing years. In fact, insider-owned firms lose value by the fifth year, compared with their value before cross-listing. Lastly, we show that liquidity and visibility enhance the value of cross-listings. |
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