Cross-listing performance and insider ownership: The experience of U.S. investors

Omar Esqueda and Dave O. Jackson

Journal of Multinational Financial Management, 2015, vol. 32-33, 77-94

Abstract: Insider-owned firms pursue U.S. cross-listings following periods of extraordinary performance. However, the long-run post-cross-listing abnormal returns become negative only for insider-controlled cross-listings. We find that the Sarbanes–Oxley Act (SOX) has mitigated the market-timing attempts as negative abnormal returns are limited to the pre-SOX period, supporting a cross-listing bonding benefit after U.S. securities regulation was enhanced. In addition, investors anticipate future operating performance as stock returns incorporate forthcoming operating outcomes one and two years ahead. Whereas capital-raising cross-listings show better operating performance than non-capital-raising, the returns of capital-raising firms are more sensitive to the potential agency problems created by insider-ownership.

Keywords: Cross-listings; Emerging markets; Market timing; Insider ownership; Firm performance; Agency problems; Sarbanes–Oxley (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:32-33:y:2015:i::p:77-94

DOI: 10.1016/j.mulfin.2015.10.001

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