Cross-Listings and M&A Activity: Transatlantic Evidence

Pasi Tolmunen and Sami Torstila

Financial Management, 2005, vol. 34, issue 1

Abstract: We analyze whether European firms choose to list shares in the US to facilitate acquisitions. Evidence from a sample of 547 European companies shows that cross-listed firms are significantly more active in acquiring US companies than are their domestically listed peers. This pattern holds even after we account for self-selection in the cross-listing decision. Crosslisted firms are also more likely to use equity payment in large transactions, but after taking self-selection into account, transaction size becomes the key determinant of the use of equity. After cross-listing, the proportion of aggregate M&A volume financed with equity increases.

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:fma:fmanag:tolmunentorstila05

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