The Geography of Equity Listing; Why Do Companies List Abroad?

Marco Pagano, Ailsa A. Roell () and Josef Zechner
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Ailsa A. Roell: Princeton University

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper documents the aggregate trends in the foreign listings of companies and analyzes both their distinctive pre-listing characteristics and their post-listing performance relative to other companies. In the 1986-97 interval, many European companies listed abroad, but did so mainly on US exchanges. At the same time, the number of US companies listed in Europe decreased. The cross-listings of European companies appear to have sharply different motivations and consequences depending on whether they cross-list in the United States or within Europe. In the first case, companies pursue a strategy of rapid expansion fuelled by high leverage before the listing and large equity issues after the listing. They rely increasingly on export markets both before and after the listing, and tend to belong to high-tech industries. In the second case, companies do not grow more than the control group, and increase their leverage after the cross-listing. Also, they fail to increase their foreign sales in the wake of the cross-listing. The only common features of the two groups are their large size, high R&D spending and high foreign sales before listing abroad.

Keywords: cross-listings; going public; initial public offerings; geography (search for similar items in EconPapers)
JEL-codes: G15 G30 G39 (search for similar items in EconPapers)
Date: 1999-10-01, Revised 2001-09-01
New Economics Papers: this item is included in nep-fmk
Note: This paper has been nominated for the 2003 Brattle Prize.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Journal of Finance, Vol. 57, No. 6, December 2002, pages 2651-2694

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Related works:
Journal Article: The Geography of Equity Listing: Why Do Companies List Abroad? (2002)
Working Paper: The Geography of Equity Listing: Why Do Companies List Abroad? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:28

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