Do Cross Listed Firms Thrive Better Under Crisis? Non Parametric Evidence from Zimbabwe.

Abstract

This study sought to empirically examine whether cross listed firms perform better than non-cross listed firms in periods of economic crisis. The study reviewed several theories of the motivations for cross listing including the liquidity hypothesis, the market segmentation hypothesis, investor recognition hypothesis and the growth opportunities hypothesis. The study utilised secondary data from companies' published financial statements. A sample of sixteen (16) companies were studied, eight were cross listed, and eight were purely domestically listed. The study period was 2010-2014, and the data for analysis was in form of financial ratios. Data analysis was done using SPSS 16.0. Non-parametric methods; the Mann Whitney U test was used verify if there are differences in the performance of cross listed and non-cross listed firms. The study found that cross listed firms are more efficient, better governed and have higher market value compared to non-cross listed firm. There was however no statistical evidence of differences in the total assets and ability to pay interest obligations between the cross listed and non-cross listed firms..