The impact of a cross-listing on dividend policy

Wissam Abdallah and Marc Goergen

International Journal of Corporate Governance, 2008, vol. 1, issue 1, 49-72

Abstract: This paper conducts a test of La Porta et al.'s (2000) outcome hypothesis on a sample of firms from 18 countries cross-listing on 19 foreign stock markets. La Porta et al.'s outcome hypothesis states that firms that are listed on a stock exchange with better investor rights pay higher dividends given that shareholders are able to make them disgorge more of their cash. Therefore, one expects firms that cross list on a market with better shareholder protection to increase their dividend payout after they cross-list. The results from the univariate and multivariate cluster analyses provide support for the outcome hypothesis. In particular, there is strong support for the hypothesis if the dividend payout ratio is measured by dividends over sales.

Keywords: cross-listing; corporate governance; corporate control; investor protection; dividend policy; stock markets; cluster analysis. (search for similar items in EconPapers)
Date: 2008
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