Cross-listing and predation risk in product markets

Lu Jolly Zhou, Weimin Kong and Yunshen Li

Journal of International Financial Markets, Institutions and Money, 2023, vol. 89, issue C

Abstract: This study examines the relationship between cross-listing and product market predation risk by using cross-listed firm-level data in both A and H shares. Results investigate that firms which cross-listing in different capital markets could significantly alleviate the threat of predatory from rivals in the product market. Consistent with competitive advantage and information asymmetry hypotheses, the mechanism analysis shows that higher competitive position and better subsequent corporate accounting information environment may lead to lower predation risk for cross-listed firms. Moreover, subsample evidence suggests that cross-listing is more likely to be used as a device to decline predatory threats in countries with incomplete markets with more government intervention, higher judicial civilization, and greater financial development. Cross-listing could also decrease the firms' stock price crash risk in the capital market. Lastly, research findings offer powerful evidence and references to firms in emerging markets attempting to cross-list in other developed markets.

Keywords: Cross-listing; Predation risk; Product market; Capital market (search for similar items in EconPapers)
JEL-codes: G11 G32 L1 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:89:y:2023:i:c:s1042443123001282

DOI: 10.1016/j.intfin.2023.101860

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