The global recognition strategy of blue chips of the Russian and Commonwealth of Independent States (CIS) markets

Oksana Kim

Journal of Contemporary Accounting and Economics, 2013, vol. 9, issue 2, 151-169

Abstract: This study examines the mechanisms through which companies domiciled within the Commonwealth of Independent States (CIS) overcome market segmentation barriers which are the legacy of the Soviet Union. In contrast to a conventional cross-listing mechanism, leading CIS firms pursue reverse cross-listing or single-listing strategies, selecting the London Stock Exchange (LSE) as their main or only capital-raising platform. This study documents short-term IPO underperformance for single-LSE and dual-listed firms, suggesting that listing in London is risky, and that firms should consider alternative capital-raising strategies. Recent national regulatory reforms, which are expected to both improve capital market conditions and to encourage firms to list domestically, present CIS firms with such an opportunity. Finally, this study shows that CIS blue chips outperform the UK market in the long-run. This effect is more pronounced for dual-listed firms that also outperform the Russian market.

Keywords: Global Depositary Receipts; CIS stock market; Blue chips; Initial public offering (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:9:y:2013:i:2:p:151-169

DOI: 10.1016/j.jcae.2013.06.003

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