Private Benefits and Cross-Listings in the United States

Evangelos Benos () and Michael Weisbach

No 10224, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, we review the literature on private benefits and cross-listings in the United States. We first discuss the alternative approaches used to measure private benefits. We survey recent evidence documenting cross-country differences in the levels of private benefits obtained by corporate managers, as well as the country-specific factors associated with high and low private benefits. We then explain how, by cross-listing its stock in a market with high disclosure and regulatory standards such as the United States, a firm can commit to a relatively low level of private benefits in the future. We discuss the circumstances under which managers would choose to cross-list their stocks in the United States, when such a cross-listing has important implications for managers' private benefits. Finally, we survey recent empirical work that tests empirical implications of this bonding view of cross-listings. Overall, this evidence provides a compelling case that the desire to protect shareholders' rights so as to facilitate access to equity markets is one of a number of reasons why firms choose to cross-list their stocks in the United States.

JEL-codes: F3 G3 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-fmk
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (76)

Published as Benos, Evangelos and Michael S. Weisbach. "Private Benefits And Cross-Listings In The United States," Emerging Markets Review, 2004, v5(2,Jun), 217-240.

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Journal Article: Private benefits and cross-listings in the United States (2004)
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