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The Stock Price Impact of Overseas Listings
... Accordingly, Bris et al. (2007) conclude that cross-listings constitute positive quality signals. Stocks tend to experience negative drifts in the days and months following the listing events (Alexander and Janakiramanan 1988;Dharan and Ikenberry 1995;Foerster and Karolyi 1999;Howe and Kelm 1987). However, Miller (1999) and Jayaraman et al.(1993) fail to confirm such affects. ...
... A closer look at the individual days after the listing events shows that this effect is especially attributable to day two, with a significant negative AAR of − 1.21%. These results are in line with the literature on stocks (Foerster and Karolyi 1999;Howe and Kelm 1987) and cryptocurrencies (Ante 2019) and suggest that existing investors use the increased liquidity of cross-listing events to sell all or part of their holdings, and this increased supply overcompensates the demand from new traders. ...
... The bulk of these effects occurs in (− 3, − 2) and in (+ 2, + 3), which indicates that high market liquidity is used for unloading. Existing investors may use pre-listing phases to enter positions and the post-listing phase to liquidate their positions, as suggested by the literature on cross-listings (Foerster and Karolyi 1999;Howe and Kelm 1987). With regard to Bitcoin's market capitalization, we only find a significant negative effect for the post-listing window (+ 2, + 3). ...
Initial coin offerings (ICOs) represent a novel funding mechanism where digital tokens are issued on the blockchain and sold to investors. One major reason for the success of this financing model is the fact that the issued tokens can immediately be traded on secondary markets. This event study analyzes 250 exchange cross-listings of 135 different tokens issued through ICOs on 22 cryptocurrency exchanges. We find significant abnormal returns of 6.51% on the listing day and 9.97% over a seven-day window around the event. Further analysis shows that the results clearly differ for individual cryptocurrency exchanges, as listings on individual exchanges yield returns of up to 34% on the event day, while others are negligible. An investigation of liquidity-related metrics shows that lower prior trading volume and asset market capitalization have positive effect on listing returns. Investors use phases of high market liquidity to sell off positions around the period of cross-listing events. The results on the cross-listing effects of ICOs may be of relevance to investors/traders, ICO projects, cryptocurrency exchanges and regulators.
... Accordingly, Bris et al. (2007) conclude that cross-listings constitute positive quality signals. Stocks tend to experience negative drifts in the days and months following the listing events (Alexander and Janakiramanan 1988;Dharan and Ikenberry 1995;Foerster and Karolyi 1999;Howe and Kelm 1987). However, Miller (1999) and Jayaraman et al.(1993) fail to confirm such affects. ...
... A closer look at the individual days after the listing events shows that this effect is especially attributable to day two, with a significant negative AAR of -1.21%. These results are in line with the literature on stocks (Foerster and Karolyi 1999;Howe and Kelm 1987) and cryptocurrencies (Ante 2019). The results suggest that existing investors use the increased liquidity of crosslisting events to sell all or part of their holdings, and this increased supply overcompensates the demand from new traders. ...
... The bulk of these effects occurs in (-3, -2) and in (+2, +3), which indicates that high market liquidity is used for unloading. Existing investors may use pre-listing phases to enter positions and the post-listing phase to liquidate their positions, as suggested by the literature on crosslistings (Foerster and Karolyi 1999;Howe and Kelm 1987). With regard to Bitcoin's market capitalization, we only find a significant negative effect for the post-listing window (+2, +3). ...
... Accordingly, Bris et al. (2007) conclude that cross-listings constitute positive quality signals. Stocks tend to experience negative drifts in the days and months following the listing events (Alexander and Janakiramanan 1988;Dharan and Ikenberry 1995;Foerster and Karolyi 1999;Howe and Kelm 1987). However, Miller (1999) and Jayaraman et al.(1993) fail to confirm such affects. ...
... A closer look at the individual days after the listing events shows that this effect is especially attributable to day two, with a significant negative AAR of -1.21%. These results are in line with the literature on stocks (Foerster and Karolyi 1999;Howe and Kelm 1987) and cryptocurrencies (Ante 2019). The results suggest that existing investors use the increased liquidity of crosslisting events to sell all or part of their holdings, and this increased supply overcompensates the demand from new traders. ...
... The bulk of these effects occurs in (-3, -2) and in (+2, +3), which indicates that high market liquidity is used for unloading. Existing investors may use pre-listing phases to enter positions and the post-listing phase to liquidate their positions, as suggested by the literature on crosslistings (Foerster and Karolyi 1999;Howe and Kelm 1987). With regard to Bitcoin's market capitalization, we only find a significant negative effect for the post-listing window (+2, +3). ...
Initial coin offerings (ICOs) represent a novel funding mechanism where digital tokens are issued on the blockchain and sold to investors. One major reason for the success of this financing model is the fact that the issued tokens can immediately be traded on secondary markets. This event study analyzes 250 exchange cross-listings of 135 different tokens issued through ICOs on 22 cryptocurrency exchanges. We find significant abnormal returns of 6.51% on the listing day and 9.97% over a seven-day window around the event. Further analysis shows that the results clearly differ for individual cryptocurrency exchanges, as listings on individual exchanges yield returns of up to 34% on the event day, while others are negligible. An investigation of liquidity-related metrics shows that lower prior trading volume and asset market capitalization have positive effect on listing returns. Investors use phases of high market liquidity to sell off positions around the period of cross-listing events. These first results on the cross-listing effects of ICOs may be of relevance to investors/traders, ICO projects, cryptocurrency exchanges and regulators.
... The commonly cited reasons for listing of stocks on domestic or overseas stock exchange include more marketability, free publicity for the firm (Van Horne 1970), better relationship between the companies and foreign governments, increase in the demand for a company's stocks owing to the purchase of stocks by foreign investors, a possible foreign source of funds at a cheaper rate, ease of selling debt securities to foreign markets, (Howe and Kelm, 1987); potential ease of acquisitions caused by increased marketability, enhanced liquidity and more visibility through the trading statistics (Lee 1991 In a similar study, Sanger and McConnell (1986) that the absolute size of firm, the relative size of the firm in its domestic capital market, and the industry in which the firm mainly operates are the factors to significantly influence the decision of foreign-listing. However, no significant relationship was found between foreign assets and the decision to list the securities on overseas exchanges. ...
... The study by Prencipe A summary of the variables used in disclosures studies is given in Table 2.1. Craig and Diga (1998) McKinnon and Dalimunthe (1993) Meek et al. (1995), Hossain et al. (1995), Herrmann and Thomas (1996), Archambault and Archambault (2003), Hope (2003) Overseas listing Howe and Kelm (1987) Lee 1991 ...
... The prior studies (Howe and Kelm 1987, Lee 1991, Hossain et al. 1995, Thomas 1996, Archambault and Archambault 2003 have measured foreign listing as a binary variable which takes the value of 1 if the firm's securities are listed on a foreign stock exchange, 0 otherwise. ...
... 2 There have been several instances where it has resulted in lower values for the stakeholders of the firms, and the risk faced by them has increased. Howe and Kelm (1987) and Alexander, Eun and Janakiramanan (1988), among others, document negative returns for shareholders when firms cross-list in foreign markets. Howe, Madura and Tucker (1993) and Jayaraman, Shastri and Tandon (1993) report increased volatility when firms crosslist their securities on foreign exchanges. ...
... There have been several studies that have looked at the return and risk associated with U.S. firms cross-listing their securities on foreign securities exchanges [Alexander, Eun and Janakiraman (1988), Foerster and Karolyi (1999), Howe and Kelm (1987), Howe and Madura (1990), and Jayaraman, Shastri and Tandon (1993), among others]. However, there are very few studies that have addressed the issue of non-U.S. ...
... The studies in this vein of literature have found mixed results. While Howe and Kelm (1987) find negative excess returns following the cross-listing of 165 U.S. firms on foreign securities exchanges, Lee (1991) does not detect any significant effect on the wealth of the shareholders of 141 U.S. firms that listed on foreign markets. Lee (1992) finds that U.K. firms listing on the Tokyo Stock Exchange also does not have any effect on their shareholder wealth. ...
With the globalization of world capital markets and the opening of previously closed markets, firms have been trying to create value by cross-listing their securities on various foreign securities exchanges. Cross-listing has the potential to improve a firm's ability to raise financing at a lower cost, enhance the firm's reputation and profile in global markets, provide access to a broader range of investors, and improve the liquidity of the firm's securities. However, the regulatory and operating costs of listing on foreign securities exchanges can outweigh the benefits. Studies that have looked at the effects of cross-listing by firms on foreign securities exchanges have found mixed results. While some of them have found that cross-listing is associated with positive excess returns due to the listing, others have found that the listing results in losses for the shareholders. This study analyzes the effects of a large sample of firms from Brazil, Russia, India and China cross-listing on the various exchanges in the U.S. during 1992-2006. We find that only Indian and Chinese firms experience a significant negative reaction at the time of cross-listing. We also find that firms that will be subject to additional scrutiny by the investors, and firms that raise capital at the time of cross-listing have an adverse reaction during the listing period. The return volatility of firms from India and Brazil are stable around the listing period, while it increases significantly for Chinese and Russian firms.
... This paper is organized as follows: Section 2 presents the specific literature of earlier studies, Section 3 describes the data; section 4 defines the research method, section 5 shows the empirical evidence of event study and variance ratio analysis and finally section 6 provides the summary and conclusion. Howe and Kelm (1987) study the impacts of cross listings from two perspectives. First, they investigate the impacts of cross listings by U.S companies on the Basel, Frankfurt and Paris stock exchanges. ...
... As a result of event study analysis, we find negative and significance abnormal returns on the listing day and the day before. Our results regarding the impact of cross listings on returns consistent with Howe and Kelm (1987), Alexander et al. (1988), However our results are not consistent with Jayaraman et al. (1993) who find positive and significant abnormal returns on the listing day. ...
This paper investigates impact of international cross listings on risk and return of the underlying stocks in Turkey. We examine a sample of ADRs issued by Turkish companies. We apply event study methodology and variance ratio analysis to 17 underlying stocks’ data. As a result, we find negative and significant abnormal returns on the listing day and the day before. Also, results of the variance ratio analysis show that variance of the most stocks decrease following the ADR listing.
(PDF) Impact of International Cross Listings on Risk and Return: Evidence from Turkey. Available from: https://www.researchgate.net/publication/307544873_Impact_of_International_Cross_Listings_on_Risk_and_Return_Evidence_from_Turkey [accessed Jan 30 2021].
... Our work is also related to the empirical literature that looks at the determinants of a firm's choice of foreign exchange listing (see, e.g., Saudagaran, 1988;Saudagaran and Biddle, 1995;Blass and Yafeh, 2000;Pagano et al., 2002), the large empirical literature on announcement effects on the stock price of foreign firms listing on U.S. exchanges (see, e.g., Jayaraman et al., 1993;Forester and Karolyi, 1993;Alexander et al., 1988;Miller, 1999), and also the empirical literature that focuses on the announcement and other effects of overseas listing by U.S. firms (e.g., Howe and Kelm, 1987;Lau et al., 1994). ...
... Most research that focuses on foreign firms listing in the U.S. market (e.g., Jayaraman et al., 1993;Forester and Karolyi, 1993;Alexander et al., 1988) concludes that the announcement of a foreign listing on a U.S. exchange is associated with a positive market reaction. In contrast, the empirical research focusing on overseas listing of U.S. firms (e.g., Howe and Kelm, 1987;Lau et al., 1994) finds either negative or insignificant changes in shareholder wealth. 38 One example that comes to mind is the competition between NYSE and the American Stock Exchange (AMEX), which have the same investor base. ...
... The domestic listing can be traced back to as far as 100 years ago, and the international listing became a momentum since 1970s, which matches the rapid integration among world capital markets. Numerous studies have reported significant benefits associated with domestic listing (Furst,1970, Ying et al. ,1977, Fabozzi ,1981 and oversea listing (Miller 1999, Foerster and Karolyi 1999, Doidge et al. 2004) while a number of them report neutral market reaction to listing or diminishing benefit over the long run (eg, Dubofsky and Groth,1984, Howe and Kelm, 1987, Lee 1991, Varela and Lee, 1993a, and Sarkissian and Schill 2008. Studies on domestic delisting typically report negative delisting premium or reduced liquidity (Jarrell 1984, Sanger and Peterson, 1990, Shumway and Warther, 1999, Chandy, Sarkar and Tripathy, 2004. ...
... Early studies typically report negative or neutral market reaction to cross listings. For example, Howe and Kelm (1987) examined stocks cross listed in NYSE but do not find signiciant market reaction to cross listing. Similar findings are reported by Alexander, Eun and Janakiramanan (1988), Lee (1991), Varela and Lee (1993) etc. ...
Employing a comprehensive sample of domestic and international listings, this paper provides a complete picture of listings and delisting in domestic and foreign markets across the global and overtime. This study examines the aggregate trends and changes in domestic stock listing, foreign listing and delisting. Domestic listings are examined alongside foreign listings, and comparison is made between listing and delisting. What's more, the overseas listings in multiple countries are included and analyzed.
... Studies on the law of one price often investigate foreign exchange rates or commodity prices in different regions or countries (see, e.g., Parsley and Wei, 1996;Goldberg and Verboven, 2005), international trades (Goodwin et al., 1990), and multiple (overseas) stock listings (e.g. Foerster and Karolyi, 1999;Howe and Kelm, 1987). Corporate bond and option markets are found to be relatively well integrated, which allows estimation of bond credit spreads through a combination of a long equity position and a short put option, both with observable market values (Culp et al., 2018). ...
Credit default swaps and deep out-of-the-money put options can be used for credit protection, but these markets are not perfectly integrated, leading to different implied hazard rates. The differences in the implied hazard rates are linked to deviations between consensus rating-based hazard rate curves in the two markets, and a residual component related to market frictions. We show that both components diminish over time, but their convergence is asynchronous. A trading strategy based on a joint signal from the curve and residual differences outperforms a conventional trading approach that relies on the absolute differences between the implied hazard rates. Hedge funds are likely to exploit within-market inefficiencies and deviations from rating-based curve, but they do not seem to profit from market segmentation.
... On the other hand, other studies have found the opposite results to be true and that they do not support the validity of the market segmentation hypothesis (e.g. Howe & Kelm, 1987;Howe, Madura, & Tucker, 1993;Lau, Diltz, & Apilado, 1994). ...
Cross listing has become a worldwide phenomenon and is considered a great way for listed companies to raise extra capital and gain access to new markets and segments. However, the impact of cross listing is very vague and data and research regarding the subject in relation to the Arabian Gulf are very limited. It is very important to know the implications of cross listing; in addition, the relationship between cross listing and the price movement of the cross listed company in both the home and host markets (i.e., existence of arbitrage).The purpose of this research study is to not only gain a better insight on the performance and consequences of cross listing in the Gulf, but also whether arbitrage trading is possible or not, taking into consideration the difference in the listing currency between home and host markets, along with the level of volume traded on the stock. The sample data for this research study was manually collected from the official websites of the Bahrain Bourse, Bourse Kuwait and the Dubai Financial Markets, whilst exchange rates have been gathered from the Bloomberg Terminal system. There were 8 Bahraini cross listed companies as of 31st December 2019; however, 4 companies have been excluded due to extreme illiquidity of the stocks in both the home and host markets; therefore, a sample data of 4 firms were analysed using EViews 9 software and Statistical Product and Service Solutions (SPSS). The Wilcoxon Test was conducted to test for arbitrage between home and host markets; Multiple regression analysis was performed to test the relationship between arbitrage and liquidity, returns, and exchange rate; the Granger Causality test was used to test for causality between arbitrage and exchange rates. The Wilcoxon Test showed that there is a significant difference in share price of certain listed companies tested, on a yearly basis and for the period of 2016 to 2019 as a whole. The multiple regression showed different results for each analysed cross listed company, indicating that arbitrage is company based and not an index based, whilst the Granger Causality test showed that the exchange rate was not the cause of arbitrage, vice versa. This paper provides valuable input to all GCC listed companies, regulators, investors, and other Capital Market stakeholders by providing them with solid data on the effects and consequences of cross listing.
... Negative price drifts after cross-listing events have been found both in stock markets (Alexander and Janakiramanan 1988;Dharan and Ikenberry 1995) and in cryptocurrency markets (Ante 2019; Ante and Meyer 2019). However, findings for stock markets vary, as Foerster and Karolyi (1999) and Howe and Kelm (1987) identify negative effects on the days following listing events, while Miller (1999) and Jayaraman et al. (1993) do not. ...
The low level of regulation and publication requirements in cryptocurrency markets leads to little information on cryptocurrency projects being publicly available. Against the background of high information asymmetry, the interpretation of the available information is all the more important. This paper examines how initial coin offering (ICO) characteristics affect cross-listing returns, i.e. whether or not available information is a valuable market signal of quality. For this purpose, we analyze 250 cross-listings of 135 different tokens issued via ICOs and calculate abnormal returns for specific samples using event study methodology. We find that cross-listing returns are driven by success in terms of token performance and project funding, as well as by jurisdiction-specific characteristics like the extent of regulation and domestic market size. Other characteristics such as the choice or change of blockchain infrastructure, token distribution across investors and the project team, campaign duration and whitepaper characteristics also seem to influence perceived project quality and thus cross-listing returns. The results contribute to the literature on cross-listings, cryptocurrency markets and entrepreneurial finance in the form of ICOs. They also make it possible to interpret the information available on the market and enable investors, project teams and cryptocurrency exchanges to evaluate probable market reactions to cross-listings.
... Negative price drifts after cross-listing events have been found both in stock markets (Alexander and Janakiramanan 1988;Dharan and Ikenberry 1995) and in cryptocurrency markets (Ante 2019; Ante and Meyer 2019). However, findings for stock markets vary, as Foerster and Karolyi (1999) and Howe and Kelm (1987) identify negative effects on the days following listing events, while Miller (1999) and Jayaraman et al. (1993) do not. ...
... Similarly, negative drifts after cross-listing events have been found both in stock markets (Alexander and Janakiramanan 1988;Dharan and Ikenberry 1995) and in cryptocurrency markets (Ante 2019;Ante and Meyer 2019). However, findings for stock markets vary, as Foerster and Karolyi (1999) and Howe and Kelm (1987) identify negative effects on the days following listing events, while Miller (1999) and Jayaraman et al. (1993) do not. ...
The lack of transparency in cryptocurrency markets means that investors must assess a project’s quality on the basis of public information. This paper examines how initial coin offering (ICO) characteristics affect cross-listing returns, i.e. whether or not the available information is a valuable signal of quality. For this purpose, we analyze 250 cross-listings of 135 different tokens issued via ICOs and calculate abnormal returns for specific samples using event study methodology. We find that cross-listing returns are driven by success in terms of token performance and project funding, as well as by jurisdiction-specific characteristics like the extent of regulation and domestic market size. Other characteristics like the choice or change of blockchain infrastructure, token distribution across investors and the project team, campaign duration and whitepaper characteristics also seem to influence perceived project quality and thus cross-listing returns. The results provide insights for the literature on cross-listings, cryptocurrency markets and entrepreneurial finance in the form of ICOs. They also make it possible to interpret the information available on the market and enable investors, project teams and crypto currency exchanges to evaluate probable market reactions to cross-listings.
... Analiz sonucunda, uzun dönemde cari açığı artıran en önemli faktörün, finansal serbestleşme ve düşük faiz oranları sonucunda meydana gelen kredilerdeki artış olduğunu tespit etmişlerdir. Büyükkarabacak ve Krause (2009), 1987 döneminde Türkiye'nin de aralarında bulunduğu 18 gelişmekte olan ülkede, tüketici ve ticari krediler ile dış ticaret dengesi arasındaki ilişkiyi dinamik panel analizi yöntemi ile araştırmışlardır. Analiz sonucunda, tüketici kredilerinin dış ticaret dengesini olumsuz yönde etkilediği, ticari kredilerin ise olumlu yönde etkilediğini tespit etmişlerdir. ...
... Studies on the LOP often investigate the foreign exchange rate or commodity price in different regions or countries (see, e.g., Parsley and Wei, 1996;Goldberg and Verboven, 2005), and for international trades (Goodwin et al., 1990), as well as compare stock prices across multiple (overseas) listings (e.g. Foerster and Karolyi, 1999;Howe and Kelm, 1987). Our paper further contributes to the discussion of LOP and market integration across CDS and DOOMP markets. ...
Credit default swaps (CDSs) and deep out-of-the-money put (DOOMP) options can both be used as a credit protection instrument. However, partial market segmentation results in deviations between firm hazard rates implied by these contracts. These deviations are driven by a systematic component--difference in the consensus rating-based levels of hazard rates in the two markets, and an idiosyncratic component, arising due to market frictions. We show that both components diminish over time, but their convergence is asynchronous. A trading strategy based on a joint signal of both systematic and idiosyncratic deviations delivers a positive arbitrage return after transaction costs and outperforms a conventional approach on trading on the absolute deviations between CDS- and DOOMP-implied hazard rates.
... Результати дослідження виявили, що компанії мали позитивні відхилення у прибутковості ближче до завершення торгів. Однак Хове і Кельм (1987) [9] у своїй роботі "The stock price impacts of overseas listings" указали на негативну дохідність завдяки міжнародному лістингу акцій на фондових біржах у Базелі, Франкфурті, Парижі та Токіо протягом 1962-1985 рр. У протилежність численним прикладам позитивної дохідності інвесторів-резидентів, ці результати виявили також і їхні збитки під час виходу на міжнародні ринки капіталів. ...
In the conditions of globalization of the economic environment, the integration processes of the international capital markets are intensifying, which envisages the possibility of placing securities in foreign markets. This gives some benefits to national investors and issuers. These benefits include: scaling up the attraction of investors' financial resources; strengthening of the business reputation and issuer's credit rating; Successful placement of shares in the international market contributes to the increase of profits. International listing of shares increases the prestige and image of the issuer. The main motivation of most companies entering the foreign capital markets is only financial - they plan to increase their capital in the markets of highly developed countries and increase the liquidity of their shares. International listing provides new markets for more active securities that do not require detailed reporting and have significant liquidity. In some cases, the introduction of international listing increases the value of the company's shares. As a rule, this happens more often in the US, when the market value of shares is higher than that existing on the issuer's market. Moreover, the fact of an increase in the number of investors who buys company shares increases the liquidity of shares, narrowing the spread. That is, the main motive for stock quotes abroad is to increase the value of its capital and liquidity of shares, which will eventually give an opportunity to attract additional capital. All this contributes to the growth of the number of national companies that market their shares on foreign stock exchanges. Investigated double listingof shares of companies; discloses the conditions under which the international listing of shares of companies becomes one of the most appropriate ways of financing business; the influence of international listing of companies' shares on the liquidity of shares in the domestic market, increase of trading volume of shares of the company was revealed; invited Ukrainian joint-stock companies to use the international listing to increase their capitalization.
... Scholars who have examined firms that trade on overseas exchanges point to a variety of reasons why those firms choose to seek equity financing in the United States. Saudagaran (1988) as well as Biddle and Saudagaran (1991), among others (e.g., Howe & Kelm, 1987;Mittoo, 1994), suggest that overseas listings are expected to result not only in financial benefits, but also in marketing and public relations benefits, political benefits, and employee relations benefits. Moreover, a US-listing can aid firms through enhancing operations or sales in the United States, enhancing analyst coverage, and by providing firms with larger amounts of capital in order to pursue growth and acquisition strategies (Ritter & Welch, 2002). ...
To date there is little understanding of the factors that impact the survival of foreign IPOs after they list on US stock exchanges. In this study, we examine how foreign IPO survival is contingent on institutional factors associated with the firm's home country. We also explore how corporate governance and organizational identity influence the survival of foreign IPOs in the United States. Results suggest that the US institutional environment supports foreign firms with more independent and professional leadership, and that knowledge-intense organizations have higher chances of long-term success after listing on US exchanges.
... 2 Literature review and hypotheses 2.1 Capital market liability of foreignness While a foreign IPO offers many advantages including expanded investor base, international reputation, marketing and political benefits (Biddle and Saudagaran 1991;Howe and Kelm 1987;Saudagaran 1988), it is also known that foreign issuers encounter significant barriers to entry and suffer from various liabilities of foreignness (Bell et al. 2012). Zaheer (1995, p. 343) defines liability of foreignness as ''all additional costs a firm operating in a market overseas incurs that a local firm would not incur.'' ...
We examine the diversification of pre-IPO ownership of foreign-listed firms and how the presence of pre-IPO shareholders from the host country affects foreign issuer’s subsequent IPO and post-IPO activities. Using a sample of foreign-listed Chinese firms, we find that the presence of pre-IPO shareholders from the host country is associated with a significant reduction in direct and indirect IPO costs, especially for issuers without international sales and for firms operating at a loss. Benefits of such pre-IPO affiliation persist into the post-IPO period as manifested in greater analyst coverage and better acquisition performance in the host country. Our paper provides new insight on the value of pre-IPO ownership diversification and identifies one strategy that firms can use to overcome the liability of foreignness.
... There are a variety of reasons why firms choose to seek equity financing outside of the home markets. In addition to the financial benefits, marketing and public relations benefits, political benefits, and employee relations benefits have been pointed out (Biddle & Saudagaran, 1991;Howe & Kelm, 1987;Mittoo, 1992;Saudagaran, 1988). Using data on the capital raising activities of foreign firms in the U.S., it has been demonstrated that a successful listing can enhance operations or sales in the U.S., enhance analyst coverage, and provide firms with larger amounts of capital in order to pursue growth and acquisition strategies (Ritter & Welch, 2002). ...
... Price and return behavior of stocks around international listings is investigated in many studies. Howe and Kelm (1987), Lee (1991) Sarkissian and Schill (2009) test whether there are any permanent valuation gains to overseas listings. They use a global sample of 1,676 listings from 1,130 firms in 25 countries and employ a wide event window of 120 months prior and after listing to detect any permanent valuation gains as a result of a decrease in the cost of equity capital. ...
In the context of capital market integration, a sample of 64 US firms is examined for any evidence of changes in stock risk as a result of international listings. Several risk measures are tested. Although we are not able to reject the hypothesis that domestic market betas do not change as a result of international listings, we find statistically significant evidence that cross-listings are associated with increases in foreign beta values. This means that sensitivity of stock returns to the common factors of the cross-listed countries increases, suggesting a decreasing effect of international listings on segmentation. Total risk of stocks are found to increase after cross-listings, consistent with the premise that increased information, trading volume, time and number of informed traders as a result of international listings increase the variance of stock returns. Overall, these results suggest evidence of capital market segmentation, rather than integration.
... Other studies on international listings find results that are different from Jayaraman et al. Howe and Kelm [11] find insignificant returns on listing day and in the post-listing period, and significant negative pre-listing returns. ...
American Depositary Receipts (ADRs) have recently experienced a notable increase in significance in terms of their visibility in U.S. financial markets and their overall role in international finance. This study investigates the investment return performance of newly created ADRs listed on U.S. markets in the period immediately following their introduction. Variation in return performance between different categories of listed ADRs is marked. Those associated with worldwide IPOs have impressive first day Abnormal Returns, and an average Cumulative Abnormal Return (CAR) of 25.62% over the first 100 trading days. This pattern is particularly notable for ADRs associated with privatizations, which have first day Abnormal Returns of 21.93% and an average CAR over the first 100 days of 43.43%. Some ADR listings are IPOs for U.S. markets, but have previously traded abroad and thus have elements of being Seasoned Equity Offerings. These post smaller first day gains, but have a 100-day average CAR of 12.81%. In contrast to the above categories, ADR listings not associated with the raising of new capital have minimal Abnormal Returns.
... Howe and Kelm (1987) illustrate that US companies report negative abnormal returns around international listings. In additionAlexander, Eun and Janakiramanan (1988) find that stock prices do not increase as a result of an international listing.10 ...
Over the last three years there has been increased speculation in Europe and elsewhere as to the relative merits of merging a number of national and international financial exchanges. In some respects, the development of financial markets is an important aspect of economic development, and several countries in the Southern Africa Development Community region have a financial exchange. However, the vast majority of these exchanges have a small number of listed securities and low levels of capitalisation and liquidity. The design, size, scope, institutional and regulatory framework of a financial exchange determines its relative costs and benefits. Seen in this light, without the appropriate scale, liquidity, social and technological infrastructure, it is unlikely that a financial exchange will be able to meet its strategic objectives efficiently. This article discusses the economic case for establishing a regional financial exchange for the Southern African Development Community. It suggests that the most economically efficient and least costly way of accomplishing this is for the national exchanges in the SADC region to merge. The article concludes by suggesting a number of enabling policy proposals.
... Several studies have examined the issue of listing by US companies abroad (to regimes with more lenient disclosure standards) with inconsistent results. To name a few, Howe and Keim (1987) show that overseas listing by US companies is detrimental to shareholder wealth. Similarly, Varela and Lee (1993) show negative listing eects. ...
Recent theoretical work on mild segmentation suggests that tests of dual listing should be conducted as joint tests: (a) a test of changes in market integration that may affect asset returns through investors portfolio reallocations as the choice set changes, and (b) a test of changing risk premium/information effects. Previous empirical studies on common stocks have been unable to identify significant positive abnormal returns associated with international listing. However, such studies have not formally tested for changes in market integration through time. In addition, they have not examined announcement dates, which should be the focal point in testing for valuation effects. Unlike previous studies, our analysis concentrates on both the period surrounding the earliest public announcements by Canadian companies of their intentions to seek a US listing for their common shares on the NYSE, AMEX, or NASDAQ as well as the date of US listing during the period 1985–96. This period encompasses significant changes in the regulatory environment which might be perceived to enhance the integration of the two markets. Relying on a conditional asset pricing model subject to time-varying volatility, the results of this study fail to support the view that market integration has increased between the Canadian and US stock markets over the 1985–96 period. The significantly positive announcement effects of Canadian stock listings in the US stock market are consistent with the view that the two markets remain mildly segmented despite the elimination of several institutional changes that should have enhanced capital market integration between the two stock markets. Our evidence also implies that firms operating in mildly segmented capital markets can attain a lower risk premium through international stock listings.
... Our tests suggest that the first listing is associated with unique transitory valuation effects but that unique permanent valuation effects are uncertain. 3 The only paper that we are aware of which attempts to disentangle the effects of listing chronology is that of Howe and Kelm (1987). The authors examine listings of U.S. firms on four overseas markets. ...
This paper tests whether foreign equity listings are associated with permanent valuation gains and examines how market and
firm characteristics influence any valuation effects. Using a global sample of 1,676 listings placed in 25 countries, we find
that much of the valuation gains to overseas listings are not permanent. The transitory nature of valuation gains holds for
both average US listings and average first-time firm listings. We find little evidence of a permanent effect on returns for
firms that list abroad, even for firms’ listings in markets that are more liquid, provide better legal protection, or have
a larger shareholder base.
The present paper explored the influence of ADRs listing on the stock returns using event study methodology. The study also employed variance ratio and GARCH model to assess the influence of cross listing of ADRs on the volatility of underlying domestic stocks. A sample of eight companies considered which issued ADRs and listed in stock market of India during the period ranging from 1998 to 2017. The sample firms present significant positive abnormal domestic stock returns during the listing day and insignificant cumulative abnormal returns after the listing day. Results show that cross listing fails to bring any investment benefits to the shareholders. The findings of the study also demonstrating the response of market to the cross listing and volatility of equity returns of shareholders. The overall inferences suggested that issuing of ADRs by Indian firms do not have a substantial influence on the underlying local stock returns and shareholders value. The outcomes of the study are pertinent to the investor community, issuing companies and regulatory decision makers of the country.
The literature reviews presented in Chapter 3 summarize most of the research on the international cross-listing phenomenon. The chapter begins by reviewing early studies of cross-listing from the perspectives of cross-listing effects on return, risk, volatility, and cost of capital. This follows with an appraisal of the new wave of recent studies in terms of multiple listing, informed trading, cross-listing and corporate governance, and price disparity. Empirical studies of each of the research topics are also discussed.
This study provides some insights into managerial perceptions of the costs, benefits, and net benefits of foreign listing through a survey of Canadian firms that have listed their securities on the foreign exchanges in the U.S. and U.K. Access to foreign capital markets and increased stock marketability are perceived to be the major benefits. The SEC reporting and compliance requirements are cited as the major costs of foreign listings. Overall, benefits are perceived to outweigh costs although not significandy. Managerial perceptions of positive net benefits are strongly linked to the levels of trading volume in their firm's stock on foreign exchanges. This study is useful for managers contemplating foreign listings. Our findings indicate that the listing decision requires careful scrutiny in terms of potential costs and benefits which may depend on many firm specific factors. Firms conducting most of their business abroad and issuing a greater percentage of equity abroad are likely to have a greater appeal for foreign investors irrespective of their size and industry. While multiple listings on foreign exchanges may not imply higher foreign trading volumes, fewer domestic exchange listings are associated with higher foreign trading volumes.
PRAVAHA JOURNAL
Year 2017
Volume 23, Issue 1
We examine the local investors’ perceptions on the relative idiosyncratic risks around cross‐listing events. We find that increases in relative firm‐specific risks around the listing date are temporary and small for Level I American depositary receipts (ADRs) while Level III ADRs have the most variations. For exchange‐listed ADRs from emerging markets, there is a significant decrease in the relative firm‐specific risk in the year prior to listing, which increases during the cross‐listing, while there are only significant increases in relative firm‐specific risks for developed market firms. We interpret these as evidences of negative relationship between firm opaqueness and relative firm‐specific risks.
Companies, which want to trade in more than one stock exchange, prefer stock exchanges with abundant international liquidity. Double posting is to export shares for second time in a foreign stock exchange after exporting stocks from the national stock exchange. Cross-registration means that a company re-registers its stocks in a second stock exchange within the same country borders. There are many methods to register international stock exchange. Exporting the warehouse certificates is the most preferred method from these methods. Companies adjust their financial statements according to the legislation of the stock exchanges. Since prices are different in each stock exchange, the value of the company changes in stock exchanges, which the company trades. Trading in more than one stock exchange reduce cost of capital and increase return on investment. Companies in countries where the capital market is not particularly developed want to spread the capital to the broad base by registering for the second time to the countries where the capital market develops. It seems that companies, which have a significant place in the world economy, are multinational companies. Companies registering more than one stock exchange both increase the company's reputation and provide capital at a more reasonable cost than national capital markets.
Birden fazla borsa da işlem görmek isteyen şirketler uluslararası likiditesi bol olan borsaları tercih etmektedir. Ulusal borsada hisse senedi ihraç edip yabancı bir borsada ikinci kez hisse senedi ihraç etmeye çifte kayıt denilmektedir. Bir şirketin aynı ülke sınırları içinde ikinci bir borsada hisse senetlerini tekrar kayıt etmesine çapraz kayıt denilmektedir. Uluslararası borsalara kayıt olmanın birçok yöntemi vardır. Bu yöntemlerden depo sertifikası ihracı en çok tercih edilen yöntemdir. Şirketler mali tablolarını işlem gördükleri borsaların mevzuatına göre düzenlerler. Her borsada fiyatlar farklı oluştuğundan şirketin işlem gördüğü borsalarda şirketin değeri de değişmektedir. Birden fazla borsada işlem görmek şirketin sermaye maliyetini düşürmekte ve yatırım karlılığını artırmaktadır. Özellikle sermaye piyasasının gelişmediği ülkelerdeki şirketler sermaye piyasasının geliştiği ülkelere ikinci kez kayıt yaparak sermayeyi geniş tabana yaymak isterler. Dünya ekonomisinde önemli bir yere sahip olan şirketlerin çok uluslu şirketler olduğu görülmektedir. Birden fazla borsaya kayıt yapan şirketler hem itibarını artırmakta hem de ulusal sermaye piyasalarından daha uygun maliyetle sermaye tedarik etmektedir.
Purpose
The purpose of this paper is to examine the common stock price reaction and the changes to the risk exposure of the cross-listing for real estate investment trusts (REITs).
Design/methodology/approach
The paper adopts the event study methodology to assess the abnormal returns (ARs). Pre- and post-cross-listing changes in the risk exposure for the domestic and foreign markets are examined, via a modified two-factor international asset pricing model. A comparison is made for two broad cross-listings, namely, the depositary receipts and the dual ordinary listings, to examine the impacts from institutional differences.
Findings
Cross-listed REITs generally experience positive and significant ARs throughout the event window, implying significant superior returns associated with the cross-listing for REITs. On systematic risks, REITs exhibit significant decline in their domestic market β coefficients after the cross-listing. However, the foreign market β coefficients do not yield conclusive evidence when compared across the sample.
Research limitations/implications
Results are consistent with prudential asset allocation for potential diversification gains from the cross-listing, as the reduction from the domestic market beta is more significant than changes in the foreign market beta.
Practical implications
The results and findings should incentivise REIT managers to explore viable cross-listing.
Social implications
Such cross-listing for REITs should enhance risk diversification.
Originality/value
This is a pioneer study on cross-listing of REITs. It provides a basis for investment decision making, and could provoke further research and discussion.
Non-U.S. firms cross-listing shares on U.S. exchanges as American Depositary Receipts earn cumulative abnormal returns of 19 percent during the year before listing, and an additional 1.20 percent during the listing week, but incur a loss of 14 percent during the year following listing. We show how these unusual share price changes are robust to changing market risk exposures and are related to an expansion of the shareholder base and to the amount of capital raised at the time of listing. Our tests provide support for the market segmentation hypothesis and Merton's (1987) investor recognition hypothesis.
This paper examines the impact of dual domestic listing of common stocks on shareholder wealth. The sample contains 137 AMEX- and NYSE-listed companies that dually listed their common stocks on the Pacific and Midwest Stock Exchanges between 1984 and 1988. Because the sample stocks do not have unlisted trading privileges, dual listing changes the market structure in which the stocks traded. Changes in market structure may affect stock returns through the liquidity services provided by the competing markets and through the possible nonhomogeneous clientele across markets. Using standard event methodology to examine stock market behavior around dual listing shows that the net effect of dual listing on returns is negative. Such negative returns suggest that corporate managers have reasons for dual domestic listing other than increasing shareholder wealth.
The paper analyses the results of a survey of European issuers on the NASDAQ market to obtain a better understanding of their motivations in selecting a first public listing market and to outline the conditions necessary and sufficient to entice such firms, or similar firms, to list their shares in Europe. The motivations of these technology leaders provide valuable insights in designing more effective risk-equity markets in Europe and the policies needed to support them. The survey responses indicate a high degree of incredulity as far as the ability of the new European equity markets to deliver large amounts of capital, repeatedly and at good valuations. On the positive side, it is also clear that most firms are taking a wait-and see attitude, giving these exchanges the chance to demonstrate their strengths. Most firms recognized the utility of a European listing, if only for its public relation impact
We consider cross-border competition by stock exchanges for listings from firms that have controlling shareholders who have private benefits. We examine exchanges’ choices of their listing standards and firms’ choices of the exchanges where they cross-list their shares. We show that the share price compensates controlling shareholders for giving up some private benefits and enables firms with growth opportunities to obtain listings on exchanges with different listing standards. In particular, firms with high-growth opportunities tend to obtain listings on stock exchanges with high listing standards. We empirically examine these predictions and find that they are consistent with evidence.
Purpose
– Financial markets’ integration and technological advances in equity trading may have reduced the potential benefits from listing a firm's shares on a foreign exchange. Nevertheless, a significant number of firms continue to cross‐list every year. This paper examines the recent cross‐listing trends and reviews the literature on motives to cross‐list.
Design/methodology/approach
– The literature review includes a summary of theoretical studies grouped into cross‐listing theories including market segmentation, liquidity, investor recognition, information disclosure, legal bonding, proximity preference and business strategy theories, and also includes a discussion of testable implications and empirical evidence for each of the above mentioned cross‐listing theories.
Findings
– An extensive cross‐listing literature offers a number of theories on the motives to cross‐list that in most cases complement each other by encompassing different aspects of the complex cross‐listing behavior. Nevertheless, continuous market developments, such as significant regulatory and technological changes in the ways capital markets operate, raise new questions on why firms cross‐list and call for further research to continue.
This paper investigates the impact of the Global Financial Meltdown of 2008 on the stock returns of the underlying domestic shares of the Indian companies' listed ADRs / GDRs issues in NYSE, NASDAQ and LSE. An event study was conducted on the stock returns of the underlying domestic shares of the 11 Indian ADRs and 17 GDRs. For the study 15th September 2008 was considered the event day when two important events announced related to the US based big financial Arms, first was about the bankruptcy of Lehman Brothers and second was about the sale of Merrill Lynch to Bank of America. The Abnormal Returns (ARs), Average Abnormal Returns (AARs) and Cumulative Average Abnormal Returns (CAARs) were computed based on the single index model using daily closing price data of the underlying companies and S&P CNX Nifty. The behavior of these variables was examined for 30 days before and 30 days after the event day. The study found that the impact of the announcement on the event day was significant for the basket of underlying domestic shares of Indian ADRs while insignificant for the basket of underlying domestic shares of Indian GDRs. However during the event window of 61 days (i.e. -30 to +30) AARs and CAARs were negative on most of the days for both the baskets of ADRs / GDRs, that clearly indicated that announcements possess important information which leads changes in the underlying stock prices. Therefore study concluded that the announcements about the failure of big financial institutions meltdown hold important information to the basket of underlying domestic shares of Indian ADRs / GDRs. Further the trend of CAARs that declined continuously even several days after the event day indicated slow assimilation of information to the stock prices that concluded that Indian stock market was inefficient in the semi strong form of Efficient Market Hypothesis (EMH) during the study period.
This paper examines the impact of the listing of American Depository Receipts (ADRs) on the risk and return of the underlying stocks. We find that the listing of ADRs is associated with positive abnormal returns to the underlying stock on the listing day. In addition, our results suggest that the listing of ADRs are associated with permanent increases in the return volatilities of the underlying stocks. We interpret this evidence as consistent with the existence of informed traders in the markets in which the ADRs and the underlying stocks trade.
Evaluation of the foreign listing decision involves many complexities since it impacts a firm's financing, investment, and marketing decisions. In this paper, we identify major costs and benefits of foreign listing based on the available evidence and suggest evaluation of the foreign listing decision using an Adjusted Present Value method. We also discuss implications of some recent regulatory changes on the costs and benefits of foreign listing.
Outlines the reasons why increasing numbers of firms list their shares on more than one stock exchange, previous research on the effects of cross-listing and inter- and intra-day liquidity patterns. Describes the market making system of the stock exchange of Hong Kong and compares 1996-1997 data on a sample of 33 Hong Kong firms cross-listed in London with a control sample. Finds the cross-listed firms have lower trading volumes, higher absolute bid-ask spreads but lower relative ones and higher average dollar depth. Uses regression techniques to investigate liquidity and presents the results which confirm that cross-listed firms are more liquid with lower relative spreads and higher depths even after controlling for differences in price, volume, return variance and intertemporal patterns.
A number of US firms voluntarily de-listed their stock from the Tokyo Stock Exchange (TSE) during the years 1977–97. We examine changes in trading volume, return volatility and implicit bid-ask spreads in the U.S. stock exchange surrounding the de-listing, and find evidence of an increase both in trading volume and bid-ask spreads, particularly when the analysis is conditioned upon (a) trading volume on the TSE prior to de-listing and (b) whether the de-listing firm had operations in Japan. We also examine the daily stock price movement of the de-listed firms and find a significantly negative price movement at the time of the de-listing announcement, and also around the actual date of de-listing. The results suggest a negative price response reflecting both a temporary information effect and also a more permanent valuation effect. Preliminary tests suggest that the latter is not related to the decrease in liquidity.
Segmentation of capital markets produces incentives for firms to adopt countermeasures, one of which is dually listing their stocks on foreign capital markets. In this paper, the behavior of stock returns surrounding such international listings is examined for a sample of firms. Assuming that the capital markets are either completely or “mildly” segmented beforehand, it is hypothesized that the international listing of a security should, in general, accompany a reduction in its expected return. The sample reveals evidence consistent with this hypothesis.
This paper presents the results obtained from a survey of various aspects of international accounting harmonization in which we submitted questionnaires to senior managers of major German companies and university professors of accounting. Most corporate managers were at least sceptical with regard to US-GAAP principles. The professors held divergent views, ranging from clear rejection to decided approval. Almost all participants agreed, albeit to different degrees, that German accounting rules reduce the demand for German shares abroad. With respect to the information value for investors in capital markets, the majority of managers had a positive opinion of German accounting. They further assumed that US accounting practice has a negative effect on capital market conditions in that it encourages short-term thinking. The academics, in contrast, were more in favor of US accounting and more critical towards German accounting. In the light of these results it was surprising to find that German accounting experts, including the managers interviewed, were far from rejecting further harmonization. Only a quarter of the managers and less than 10 per cent of the professors were decidedly against any modification of current German accounting rules. However, the experts clearly wished to limit the harmonization of accounting to consolidated financial statements. The majority of managers were in favor of giving German corporations the option of preparing their consolidated financial statements in accordance with either the German Commercial Code (HGB), IAS or US-GAAP. The academic experts, on the other hand, wished to see IAS as the authoritative basis for consolidated financial statements.
This article complements the 1993 report by the AAA International Accounting Section's Committee on Research Methodology. It focuses on seemingly paradoxical observations and conflicting findings reported in the international accounting literature. The purpose of this article is to stimulate our collective intellectual curiosity with the hope that it will motivate future researchers to search for explanations of the observed unexplained phenomena. Although the development of a framework for the systematic investigation of the unexplained observations is beyond the scope of this article, I offer a conjecture that might be considered in such an examination.
Résumé. L'article qui suit est un complément au rapport 1993 du comité sur la méthodologie de recherche de la division de la comptabilité internationale de l'AAA. Il est centré sur les observations paradoxales en apparence et les résultats conflictuels à première vue exposés dans les publications de comptabilité internationale. L'auteur a pour but de stimuler notre curiosité intellectuelle collective dans l'espoir que cette sensibilisation incite les futurs chercheurs à s'intéresser aux explications possibles des phénomènes énigmatiques qui sont observés. Bien que l'élaboration d'un cadre de référence destiné à l'analyse systématique des observations inexpliquées dépasse le projet de l'auteur, ce dernier propose une hypothèse intéressante dans la perspective d'un tel examen.
The impending 1997 assimilation into the People's Republic of China made the 1980s a challenging period for Hong Kong, one in which Kong Kong-based companies relocated their corporate domiciles to other countries as political insurance. International listing, however, is another way for companies to reduce political risk. This paper examines the post-1985 effects of Hong Kong-based company stocks being quoted on London's International Stock Exchange. We document that there is no price effect for these companies after the first trading day and a significant increase in the average trading volume surrounding the event day. This may be attributed to the London market makers who build up their stakes before the listing and who unwind their positions in the Hong Kong market after the event day. We also find that there is, on average, a decrease in systematic risk of these companies after being traded on the London market. Furthermore, the evidence shows that there is an increase in systematic risk for companies that are not listed in London after 4 June 1989, however, not for those London-listed Hong Kong companies. The results constitute evidence to support the inference that there is a reduction of local political risk for internationally listed companies.
This study provides some insights into managerial perceptions of the costs, benefits, and net benefits of foreign listing through a survey of Canadian firms that have listed their securities on the foreign exchanges in the U.S. and U.K. Access to foreign capital markets and increased stock marketability are perceived to be the major benefits. The SEC reporting and compliance requirements are cited as the major costs of foreign listings. Overall, benefits are perceived to outweigh costs although not significandy. Managerial perceptions of positive net benefits are strongly linked to the levels of trading volume in their firm's stock on foreign exchanges. This study is useful for managers contemplating foreign listings. Our findings indicate that the listing decision requires careful scrutiny in terms of potential costs and benefits which may depend on many firm specific factors. Firms conducting most of their business abroad and issuing a greater percentage of equity abroad are likely to have a greater appeal for foreign investors irrespective of their size and industry. While multiple listings on foreign exchanges may not imply higher foreign trading volumes, fewer domestic exchange listings are associated with higher foreign trading volumes.
This paper is an event-time study of OTC stocks that listed on the New York Stock Exchange (NYSE) over the period 1966–1977. This period was chosen because it spans the introduction of the National Association of Securities Dealers Automatic Quotation (NASDAQ) communications system in the OTC market. In the pre-NASDAQ period, stocks, on average, earn significant positive abnormal returns in response to listing announcements. In the post-NASDAQ period, abnormal returns in response to listing announcements are statistically significantly lower than those for the pre-NASDAQ period. These results are consistent with the hypothesis that NASDAQ has reduced the benefits associated with listing on a major stock exchange. Additionally, in both the pre- and post- NASDAQ periods, stocks, on average, earn significant positive abnormal returns following the initial announcement of listing before listing actually occurs, and they earn significant negative returns immediately after listing. These anomalies are explored and the results are shown to be insensitive to variations in empirical methodology.
This paper examines properties of daily stock returns and how the particular characteristics of these data affect event study methodologies. Daily data generally present few difficulties for event studies. Standard procedures are typically well-specified even when special daily data characteristics are ignored. However, recognition of autocorrelation in daily excess returns and changes in their variance conditional on an event can sometimes be advantageous. In addition, tests ignoring cross-sectional dependence can be well-specified and have higher power than tests which account for potential dependence.
While the value of listing equity securities has been researched extensively, no studies have examined the market reaction to the decision to list corporate debt. Since the listing of corporate bonds on the major exchanges is a significant corporate activity, this study examines the impact of bond listing on shareholder wealth. Using a variety of possible announcement dates as well as cumulative abnormal returns between dates, no detectable market reaction to debt listing is found. Therefore, the listing of corporate bonds does not appear to be valued by the common shareholders of those same firms.
Matched pairs (based on asset size and industry) of a sample of exchange-listed and over-the-counter (OTC) firms are utilized to test for the existence of a statistically significant difference between them with respect to their cost of equity capital. It is found that exchange-listed firm's cost of equity capital (alternatively measured by the systematic risk and the total risk associated with a firm's rate of return) is significantly less than that of comparable OTC firms.
Listing in London: It's Such a Very Jolly Game!
- C Fildes
C. Fildes, "Listing in London: It's Such a Very Jolly Game!", The Commercial and Financial Chronicle (June 9, 1975), p. 5.
Could Listing Your Bank's Stock Ever Be a Bad Idea?Listing and the Liquidity of Bank Stocks
- D Fraser
- J Groth
D. Fraser and J. Groth, "Could Listing Your Bank's Stock Ever Be a Bad Idea?," ABA Banking Journal (November 1984), p. 112. 7. -"Listing and the Liquidity of Bank Stocks," Jour-nal of Bank Research (Autumn, 1985), pp. 136-144.
The Stock Market Upheaval in Europe
- R Kirkland
- Jr
R. Kirkland, Jr., "The Stock Market Upheaval in Europe," Fortune (October 14, 1985), pp. 158-161, 164.
The Lure of Listing in Tokyo
- W Meyers
W. Meyers, "The Lure of Listing in Tokyo," Institutional Investor (November 1985), pp. 257, 260 and 261.
The Rise of the International Equity
- N Osborn
N. Osborn, "The Rise of the International Equity," Euro-money (May 1984), pp. 64-68.
More U.S. Concerns Seek to Be Listed Over-seas
- M Sesit
M. Sesit, "More U.S. Concerns Seek to Be Listed Over-seas," The Wall Street Journal (June 10, 1985), p. 6.