Cross-listing and the alignment between short and long-run performance

Imen Ghadhab

Journal of Multinational Financial Management, 2021, vol. 62, issue C

Abstract: This paper examines the alignment between initial price reaction and post-cross-listing performance for non-American firms cross-listed in the U.S. Using an event study methodology, we show that, while cross-listed firms exhibit long-term performance, short-term valuation gain is more important. We also find a significant difference between short and long-term price reactions, explained by legal investor protection considerations. Additional analysis shows that the change in the U.S. regulatory environment has no diminishing effect on cross-listing economic benefits. We also show more important short-run price reactions in crisis time, leading to more significant misalignment between short and long-term performance. Our results are robust to several control firm and country characteristics.

Keywords: Cross-listing; Firm performance; Event study; Legal bonding (search for similar items in EconPapers)
JEL-codes: G14 G15 G30 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:62:y:2021:i:c:s1042444x21000268

DOI: 10.1016/j.mulfin.2021.100702

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