Article ID Journal Published Year Pages File Type
5093006 Journal of Contemporary Accounting & Economics 2006 20 Pages PDF
Abstract
The literature on cross-listing generally conveys the impression that cross-listing is good news about a firm. This paper focuses on returns following cross-listing where evidence of positive results from cross-listing is mixed. Considering 81 Australian firms, we find that cross-listed firms are less profitable with higher debt levels prior to cross-listing and that they achieve significant negative abnormal returns in the three years following cross-listing. This result holds even for firms seeking the benefits of “bonding” to US disclosure requirements by cross-listing in the more regulated US markets. Our study suggests cross-listing is not an unambiguous positive signal about a firm.
Related Topics
Social Sciences and Humanities Business, Management and Accounting Business, Management and Accounting (General)
Authors
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