The market reaction to cross-listings: Does the destination market matter?

Roosenboom, Peter; Dijk, Mathijs A. Van

doi:10.1016/j.jbankfin.2009.04.010

Cited by 87 publications

(56 citation statements)

References 58 publications

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“…Consistent with the bonding hypothesis, the literature documents cross-listing on a US stock exchange is associated with small valuation gains, as measured by stock returns immediately surrounding the announcement of cross-listing (Foerster and Karolyi, 1999;Miller, 1999;Doukas and Switzer, 2000;Ammer et al, 2008;Roosenboom andvan Dijk, 2009). Miller (1999) Although there may be a significant, albeit small, valuation gain surrounding the announcement of cross-listing, some studies find little evidence that cross-listing generates positive post-listing long-run abnormal returns (Foerster and Karolyi, 1999;Sarkissian and Schill, 2009); contrasting results are reported by others.…”

Section: Firm Performance and Legal Protectionmentioning

confidence: 95%

Corporate governance, accounting and finance: A review

Brown¹,

Beekes²,

Verhoeven³

2010

Accounting &Amp; Finance

485

410

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We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The 'stickiness' of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.

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Section: Firm Performance and Legal Protectionmentioning

confidence: 95%

Corporate governance, accounting and finance: A review

Brown¹,

Beekes²,

Verhoeven³

2010

Accounting &Amp; Finance

485

410

View full text Add to dashboard Cite

show abstract

“…features could play important roles. Many studies identify that size (Hong, Torous, & Valkanov, 2007;Yeyati et al, 2009), sales growth (Roosenboom & van Dijk, 2009;Bekaert et al, 2007;Chan & Lakonishok, 2004;Lakonishok, Shleifer, & Vishny, 1992), volume turnover (Grammig, Melvin, & Schlag, 2005;Koumkwa & Susmel, 2008;Yeyati et al, 2009), firm performance (Jegadeesh & Livant, 2006;Lee, Shleifer, & Thaler, 1991;Lee & Zumwalt, 1981), and corporate leverage (Lucey & Zhang, 2011;Smith & Watts, 1992) are the crucial firm characteristics that are most likely to affect international financial integration.…”

Section: Literature Reviewmentioning

confidence: 99%

Assessing international financial integration: do industry and firm-specific characteristics matter? Evidence from the Japanese market

Chen

Chung

Lin

2018

Economic Research-Ekonomska Istraživanja

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International financial integration has received much attention among professional investors. The purpose of this study is to investigate the relationship between financial integration and industry and firmspecific characteristics through analysing cross-listing premiums (determined by the price difference between American Depositary Receipts (A.D.R.s) and their underlining stocks) in Japan. Employing autoregressive models to examine convergence speeds of a shock to the price difference and non-linear Band-threshold autoregressive models to identify non-arbitrage bands, we find that firms integrate well when they are larger in size, sales growth, turnover, performance, institutional holdings, or marked by merger activity, overseas subsidiaries, industrial or consumer goods industries, and a longer history of A.D.R. listing. That is, the A.D.R. with the abovementioned characteristics tends to have less scope for arbitrage. However, crossmarket premiums for firms which have large shareholders and a larger extent of earnings management converge more slowly and have longer half-lives, implying more arbitrage opportunities exist. The explanatory variables applied explain over 35% of variance of premium, and most of the variables remain significant determinants of half-lives whether autoregressive or threshold autoregressive modules are used, but firm leverage is not. The results show that the metals and mining industry converges notably slower than other industries, indicating arbitrage is possible.

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“…A possible explanation may be that disclosure generally induces larger stock market responses in the US market attributable to the enhanced liquidity in the US market compared to the European market (Frost and Pownall 1994). Alternatively, the large stock market response may be also credited to the investors' confidence in firms listed on the US stock market and thereby complying with higher disclosure requirements (Frost and Pownall 1994;Roosenboom and van Dijk 2009). However, as a direct comparison of the magnitude of abnormal stock performance between the results of Kimbrough and Louis (2011) and the present results lacks reliability due to differences in the estimation model and sampling period, the main inference to be drawn here is that conference calls accompanying European merger announcement demonstrate a significant positive market response comparable to prior research.…”

Section: Full Sample Analysismentioning

confidence: 99%

Value Creation in M&A Transactions, Conference Calls, and Shareholder Protection

Fraunhoffer

Kim

Schiereck

2018

IJFS

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This study investigates whether conference calls accompanying M&A announcements in Europe provide valuable information for capital market participants and hence induce an abnormal stock price revaluation on the bidder's equity. Based on handpicked data for transactions between 2008 and 2012 we focus on the five most acquisitive country markets in Europe. Overall, our results show that bidders are more likely to conduct conference calls with increasing transaction value, for transactions with public targets and non-diversifying transactions. Further, the decision for voluntary disclosure is positively influenced by increased bidder size and the comparably weaker governance systems for German and Swiss firms. After controlling for self-selection bias and other determinants of stock returns around mergers and acquisitions (M&A) announcement, evidence is in strong support that firms with merger-related conference calls yield a higher abnormal return than firms merely publishing a press release. However, significant favourable investor reaction is only present in the UK and French subsamples and in the subsamples of industries with a focus on research and development (R&D).

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The market reaction to cross-listings: Does the destination market matter?

Cited by 87 publications

References 58 publications

Corporate governance, accounting and finance: A review

Corporate governance, accounting and finance: A review

Assessing international financial integration: do industry and firm-specific characteristics matter? Evidence from the Japanese market

Value Creation in M&A Transactions, Conference Calls, and Shareholder Protection

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