Investor Communication and the Benefits of Cross-Listing

Investor Communication;Cross-listing;Accounting;Business and Economics;Business Administration

Reiter, NayanaWilliams, Christopher Don ;

University of Michigan

关键词: Investor Communication;    Cross-listing;    Accounting;    Business and Economics;    Business Administration;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/138636/nreiter_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

A large body of literature finds that cross-listing is associated with capital market benefits. However, evidence also suggests that these benefits are mostly temporary. In this paper, I investigate whether communication with U.S. investors helps non-U.S. firms maintain the capital market benefits of U.S. listings. I find that investor communication mitigates the post cross-listing decline in valuation documented by prior studies. I also find that communication choices explain variation in the valuation, cost of capital and stock liquidity of cross-listed firms in the long run. These results are robust to concerns about potential self-selection bias and are stronger for firms from countries with lower corruption risk and fewer cultural differences from U.S. culture. Lastly, I compare the valuation of cross-listed and non-cross-listed firms. My findings suggest that a significant portion of the cross-listing valuation premium is associated with the investor communication practices of these firms. Firms that cross-list in the U.S. but do not communicate with U.S. investors are not valued at a premium relative to non-cross-listed firms from the same country. Overall, my results are consistent with investor communication being an important condition for firms to maintain the long-run benefits of cross-listing.