The dark side of cross-listing: A new perspective from China

Busaba, Walid Y.; Guo, Lin; Sun, Zhenzhen; Yu, Tong

doi:10.1016/j.jbankfin.2015.04.004

Cited by 29 publications

(14 citation statements)

References 35 publications

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“…The People's Republic of China and Poland can be used as examples here. While they used to rely on overseas stock exchanges and foreign financial services providers to meet the financing needs of their large companies in the 1990s and early 2000s, they have since become more self-sufficient by developing their own capital markets and increasingly sophisticated domestic FCs (Busaba et al, 2015;Hashimoto et al, 2021;Korczak and Korczak, 2013).…”

Section: Macroeconomic and Institutional Factorsmentioning

confidence: 99%

Connectivity and growth: Financial centres in investment banking networks

2021

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We investigate the effect of urban network connectivity on the growth of financial centres. While existing research recognises the importance of network connectivity to firms, clusters as well as city regions, large-sample empirical evidence is currently scarce, particularly in the context of financial services. We contribute to this debate by studying underwriting of equity and debt securities, which represent some of the core activities of financial centres. We operationalise our analysis using a proprietary dataset collated from Dealogic Equity Capital Market and Debt Capital Market databases covering over 1.7 million interactions of investment banks with issuers across 540 cities globally during the 1993–2016 period. We estimate our regression equations using the system generalised method of moments estimator, which allows us to obtain consistent coefficient estimates on potentially endogenous regressors, including network connectivity variables. We identify a clear pattern of a positive association between network centrality of financial centres and their growth. We distinguish between intracity and intercity network connectivity and find that financial centres with a larger number of intercity network ties and assortative intracity networks grow faster, while intracity network density does not appear to affect financial centre growth. Our results on intercity network ties are broadly consistent with established knowledge of cluster networks. In contrast, our findings on financial centres' intracity networks contradict previous research that suggests that dense and disassortative intracluster networks aid economic performance of clusters.

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Section: Macroeconomic and Institutional Factorsmentioning

confidence: 99%

Connectivity and growth: Financial centres in investment banking networks

2021

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“…Charitou and Louca (2009) show that cross‐listing enlarges the magnitude of investment opportunities and reduces the cost of capital. Busaba et al (2015) indicate that cross‐listed firms receive increased analyst coverage and enhanced reputations, which enable firms to access more low‐cost capital and benefit their investments.…”

Section: The Channels Through Which Cross‐listing Influences Innovationmentioning

confidence: 99%

“…Li et al, 2015; Sun, Tong, & Wu, 2013) have documented that listing on the HK market can improve cross‐listed firms' corporate governance and investment efficiency, some scholars cast doubt on this argument. Busaba, Guo, Sun, and Yu (2015) argue that the cross‐listed Chinese firms always have the behaviour of ‘dressing‐up‐for‐premium’, which means they can take advantage of the enhanced visibility and prestige of overseas‐listing to issue shares at favourable terms, so as to raise more low‐cost funds than they can efficiently use. Liu, Jiang, and Sathye (2017) also find that firms cross‐listed on international stock exchanges have more sophisticated corporate governance mechanisms but do not outperform the counterparts that only list on the domestic market.…”

Section: Introductionmentioning

confidence: 99%

Cross‐listing on the Hong Kong Exchange and Chinese firm innovation: New evidence

Xiang

2021

Australian Economic Papers

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It has been well documented that cross‐listing can improve firms' governance quality and reduce equity financing costs, which are crucial for firms' innovation activities. In this paper, we investigate the effect of cross‐listing on the Hong Kong (HK) market on the innovation performance of Chinese mainland firms. We find that both innovation outputs and qualities increase significantly when Chinese mainland firms list their shares on the HK market. Concerning the channels through which cross‐listing encourages innovation, we demonstrate that cross‐listed firms can raise low‐cost funds in the HK market, which facilitates their innovation activities. Moreover, the HK market generates more informative stock prices, which mitigate innovation information asymmetry and also encourage firms' innovation. In general, our paper sheds light on a new factor (cross‐listing) that motivates firms to engage in innovation and highlights cross‐listing's function in improving innovation.

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“…The effect of the geographic location of an IPO on underpricing was also examined by , who concluded that the IPO underpricing of firms from provinces with more developed legal frameworks (e.g., strong legal protection of property rights) is lower. Busaba et al (2015) focused on cross-listed firms by studying the IPO performance of firms which were listed first abroad and later returned to the Chinese stock market. They suggest that firms from less-developed capital markets may take advantage of the enhanced visibility and prestige associated with a…”

Section: Market Segmentationmentioning

confidence: 99%

Initial public offerings in China: Underpricing, statistics and developing literature

Azevedo

Gűney

Leng

2018

Research in International Business and Finance

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We review more than two decades of literature on initial public offerings (IPOs) in China, discussing the research hypotheses that have been studied as well as the main findings. We summarize past and current developments in the literature and highlight the research problems which have not yet been adequately resolved. We provide updated information on the popularity of IPOs and allocation mechanisms over the last 25 years as well as on the underpricing that is associated with the usage of each IPO allocation mechanism. We also suggest new avenues for future research, based on the identified gaps in the extant literature.

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The dark side of cross-listing: A new perspective from China

Cited by 29 publications

References 35 publications

Connectivity and growth: Financial centres in investment banking networks

Connectivity and growth: Financial centres in investment banking networks

Cross‐listing on the Hong Kong Exchange and Chinese firm innovation: New evidence

Initial public offerings in China: Underpricing, statistics and developing literature

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