The Impact of Local Governance Institutions on Foreign Market Listings: The Case of Chinese Firms

Abigail Hornstein

No 2013-006, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: This paper exploits the substantial variation in market institutions across provinces in China to examine the impact of institutional quality on foreign listing. Firms that list on the U.S. and U.K. exchanges are more likely to come from better regulated provinces and tend to be at the top of a corporate pyramid. However, though the impact on firm performance of market institutions and pyramidal affiliations persists briefly post-listing with firms recording lower EPS and higher raw returns in the first year, it does not help predict whether firms remain listed abroad in 2012. Thus, we conclude that headquarters’ market institutions shape a firm through time of listing and have diminished influence over time.

Keywords: China; IPO; foreign listing; institutions; pyramid (search for similar items in EconPapers)
JEL-codes: G15 G32 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2013-09
New Economics Papers: this item is included in nep-bec, nep-cse and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The impact of local governance institutions on foreign market listings: The case of Chinese firms (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wes:weswpa:2013-006

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