Does Cross-Listing in the US Foster Mergers and Acquisitions and Increase Target Shareholder Wealth?

Jean-Claude Cosset and Siham Meknassi

Cahiers de recherche from CIRPEE

Abstract: We examine the role of cross-listing in alleviating domestic market constraint and facilitating cross-border mergers and acquisitions. Cross-listing appears to strengthen the bargaining power of target firms, allowing them to extract higher takeover premiums relative to their non-cross-listed peers. Moreover, shareholders of Sarbanes-Oxley-compliant targets seem to benefit from a higher premium. We also find that cross-listed firms are more likely to be acquisition targets. This evidence is consistent with the idea that cross-listing increases firms’ attractiveness and visibility on the market for corporate control. Our results are robust to various specifications and to the self-selection bias arising from the decision to cross-list.

Keywords: Cross-listing; mergers & acquisitions; governance; Sarbanes-Oxley Act (search for similar items in EconPapers)
JEL-codes: G15 G34 K00 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1023

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