Why do firms cross-list? International evidence from the US market

Abdallah, Abed Al‐Nasser; Ioannidis, Christos

doi:10.1016/j.qref.2009.09.009

Cited by 13 publications

(18 citation statements)

References 34 publications

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“…, is negative and significant for all REITs (-0.55977) and for REITs with depositary receipts (-0.54459). It implies a significant change in the domestic market beta coefficient and is consistent with the studies by Foerster and Karolyi (1999) and by Abdallah and Ioannidis (2010). Representing the REITs' volatility to the domestic common stock market, the reduction in the domestic market beta coefficient concurs with the market segmentation hypothesis.…”

Section: Impact Of Cross-listing On the Risk Of Reit Local Marketsupporting

confidence: 86%

“…The positive pre-crosslisting mean daily return (0.00066) changes to negative after cross-listing (Table 6 Row 3). Apart from being statistically insignificant, the trend for DOL REITs is similar to that of companies after their initial public offerings (Abdallah and Ioannidis, 2010).…”

Section: Estimation Period Event Windowmentioning

confidence: 70%

“…They conclude that cross-listings do not cause significant shifts in risk. Subsequent studies by Foerster and Karolyi (1999), Baker et al (2002) and by Abdallah and Ioannidis (2010) augmented Schipper and Thompson (1983)'s methodology in modifying the IAPM to estimate a two-factor model to capture both domestic and foreign market betas Listing options have varying requirements, ranging from the lowest in private placements to the highest in common stock market exchange listings. It leads to varying levels of information availability and so cumulates into a "rank order" of impacts (Hail and Leuz, 2009).…”

Section: The Related Literaturementioning

confidence: 99%

“…Lastly, we follow the methodology of Foerster and Karolyi (1999), Baker et al (2002) and of Abdallah and Ioannidis (2010), to examine the returns and risk behaviour of the REIT sample through a cross-sectional, two-factor IAPM. This methodology takes account of the fact that the covariance risks of an IAPM, for example that of Solnik (1974), are only defined in terms of the global market portfolio.…”

Section: Estimation Period Event Windowmentioning

confidence: 99%

“…The increased post-cross-listing mean AR from negative to positive for ALL REITs and DR REITs, though not statistically significant, show that cross-listing had positive valuation effect. Conversely, DOL REITs experienced a fall in AR after cross listing to replicate Lau et al (1994), Foerster and Karolyi (1999) and Abdallah and Ioannidis (2010). The result could be due to the "window of opportunity" effect as REIT managers usually take advantage of good market conditions to cross-list (Sarkissian and Schill, 2009;Fadl, 2010).…”

Section: Table 4 Final List Of Dual Exchange-listed Reits and Their mentioning

confidence: 99%

See 4 more Smart Citations

Cross-listing of real estate investment trusts (REITs)

Addae‐Dapaah

Peck

2017

JPIF

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This paper examines the common stock price reaction and the changes to the risk exposure of the cross listing for REITs. Design/methodology/approach: The paper adopts the event study methodology to assess the abnormal returns. Pre-and post-cross listing changes in the risk exposure for the domestic and foreign markets are examined, via a modified two-factor international asset pricing model. A comparison is made for two broad cross listings, namely the depositary receipts and the dual ordinary listings, to examine the impacts from institutional differences. Findings: Cross-listed REITs generally experience positive and significant abnormal returns throughout the event window, implying significant superior returns associated with the cross listing for REITs. On systematic risks, REITs exhibit significant decline in their domestic market beta coefficients after the cross listing. However, the foreign market beta coefficients do not yield conclusive evidence when compared across the sample. Research limitations/implications: Results are consistent with prudential asset allocation for potential diversification gains from the cross listing, as the reduction from the domestic market beta is more significant than changes in the foreign market beta. Practical implications: The results and findings should incentivise REIT managers to explore viable cross listing. Social implications: Such cross listing for REITs should enhance risk diversification. Originality/value: This is a pioneer study on cross-listing of REITs. It provides a basis for investment decision-making, and could provoke further research and discussion.

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Section: Impact Of Cross-listing On the Risk Of Reit Local Marketsupporting

confidence: 86%

Section: Estimation Period Event Windowmentioning

confidence: 70%