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The effect of cross-listing on the environmental, social, and governance performance of firms

Barbara Del Bosco and Nicola Misani ()

Journal of World Business, 2016, vol. 51, issue 6, 977-990

Abstract: We propose that cross-listing is associated with better environmental, social, and governance (ESG) performance, because cross-listed firms adopt ESG practices to mitigate the liability of foreignness (LOF) in foreign financial markets. Institutionalization processes have made ESG practices important for managing challenges associated with the LOF. With tests involving the S&P Global 1200 index, we show that cross-listing improves corporate social responsibility (CSR; i.e., social and environmental dimensions) but not corporate governance. The effects of cross-listing on CSR also depend on investor protection regimes of listing destinations: Stronger regimes correspond with poorer CSR performance, suggesting that they limit managerial discretion.

Keywords: Cross-listing; Corporate social responsibility (CSR); Corporate governance; Environmental, social, and governance (ESG) performance; Investor protection (search for similar items in EconPapers)
Date: 2016
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Handle: RePEc:eee:worbus:v:51:y:2016:i:6:p:977-990