The Dark Side of International Cross-Listing: Effects on Rival Firms at Home

Michael Melvin and Magali Valero

No 2174, CESifo Working Paper Series from CESifo

Abstract: We analyze the stock price impact of firms’ U.S. cross-listing on home-market rival firms. Using an empirical event study approach we find negative cumulative average abnormal returns for the rival firms. The evidence suggests that the dominant effect is that investors see rivals as at a relative disadvantage to the listing firm. As firms cross-list in the US and commit to the increased disclosure and investor protection associated with the US listing, they are better able to take advantage of growth opportunities relative to their non cross-listing counterparts, and this results in negative spillover effects on rival firms.

Keywords: cross-listings; rival firms; growth opportunities (search for similar items in EconPapers)
JEL-codes: G15 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Dark Side of International Cross‐Listing: Effects on Rival Firms at Home (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2174

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