Evolution of control of cross-listed companies

Wissam Abdallah and Marc Goergen

The European Journal of Finance, 2016, vol. 22, issue 15, 1507-1533

Abstract: There are two theories on the determinants of the control structure of the firm. The first theory postulates that the control structure is determined by company-specific characteristics. The second theory emphasises the importance of institutional characteristics in shaping this structure. In this paper, we test the validity of both theories in the context of a cross-listing, which causes a change to the company's legal environment. We find that the initial control structure, risk and size determine the control structure post cross-listing and that cross-listing on better quality markets facilitates the evolution of control towards more dispersed control. To conclude, company characteristics have a greater impact than country characteristics on the company's decision to cross-list and are also better at explaining the change in the control structure post cross-listing.

Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:22:y:2016:i:15:p:1507-1533

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DOI: 10.1080/1351847X.2014.1003312

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