Does cross-listing facilitate changes in corporate ownership and control?

The choice of ADRs

“…Very often, especially when local stock markets are neither developed nor liquid enough, governments choose liquid foreign stock markets to sell state-owned firms and maximize privatization proceeds (Bortolotti et al, 2002). Similarly, controlling shareholders of foreign firms that face domestic stock market constraints seem to use a cross-listing on a US stock exchange to make a change in ownership and control easier (Ayyagari and Doidge, 2010). Pagano et al (2002) argue that firms may cross-list to draw foreign investors so as to broaden their shareholder base and to increase their stock liquidity.…”

Competition among stock exchanges for equity

“…1 The empirical literature has documented evidence on the benefits of cross-listing shares in foreign capital markets. The benefits include lower cost of capital (Hail and Leuz, 2004;Errunza and Miller, 2000;Karolyi, 1999, 1993), increased stock liquidity (Berkman and Nguyen, 2010;Frijns et al, 2010;Visaltanachoti and Yang, 2010;Silva and Chávez, 2008;Fanto and Karmel, 1997;Mittoo, 1992), higher valuation of firms Claessens et al, 1999), lower private benefits (Dyck and Zingales, 2004;Nenova, 1999), and lower concentration of ownership and control (Ayyagari and Doidge, 2010;Doidge, 2004;Claessens et al, 2000). However, there has been relatively little theoretical work done on the factors that drive firms' choices of the exchanges where they list their shares, either among domestic exchanges or international exchanges.…”

Incorporation in Offshore Financial Centers: Naughty or Nice?

“…We have access to these series but the coverage of our sample firms is poor, particularly firms from China. We will use sources like Worldscope, Mergent Online, and SDC to construct measures of concentrated ownership and control following Ayyagari and Doidge (2010) and Liao (2011).…”