Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
The author examines the effect of legal
bonding on ownership and control structures of foreign firms
cross-listing in the United States. Contrary to the
predictions of corporate governance convergence theories,
there is little evidence of convergence-related migration to
a dispersed ownership structure on cross-listing. She finds
that rather than as a means to change their governance
structure, foreign firms use American Depository Receipts as
a vehicle to sell control blocks, often to a new foreign
owner. Firms that cross-list and sell stakes to domestic
owners are from large economies with high stock market
liquidity. In contrast, firm-level characteristics are more
important predictors of a control change to a foreign owner.
Cross-listing firms that sell control blocks to foreigners
tend to be smaller, have low levels of debt, and have a high
foreign income growth rate. The post cross-listing
performance of firms that undergo a control change is also
different from firms that do not experience a control change.
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Bibliographic Details
| Main Author: |
Ayyagari, Meghana |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, D.C.
2004-04
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| Subjects: | AUDIT COMMITTEES,
BENCHMARK,
CAPITAL MARKETS,
COMPANY,
CONTROL SHARE,
CONVERGENCE HYPOTHESIS,
CORPORATE GOVERNANCE,
CORPORATE OWNERSHIP,
CORPORATION,
CORPORATIONS,
COST OF CAPITAL,
DEBT,
DISCLOSURE,
DISCLOSURE REQUIREMENTS,
EXPROPRIATION,
FIRM SIZE,
FIRMS,
FORECASTS,
FOREIGN COMPANIES,
FOREIGN FIRMS,
FOREIGN INVESTORS,
FOREIGN SHAREHOLDERS,
FUTURE RESEARCH,
GOING PUBLIC,
GROWTH RATE,
LIQUIDITY,
LISTED COMPANIES,
NASDAQ,
NETWORK EXTERNALITIES,
NYSE,
OTC,
OWNERSHIP STRUCTURE,
PROFITABILITY,
ROE,
SHAREHOLDERS,
SHAREHOLDINGS,
STATEMENTS,
SUNK COSTS,
TIME SERIES,
TRANSPARENCY,
TRUSTS,
VALUATION,
WEALTH CORPORATE GOVERNANCE,
OWNERSHIP,
DEPOSITORY RECEIPTS,
FINANCIAL POLICIES,
CAPITAL STRUCTURE,
STOCK MARKETS,
MARKET VALUE,
CONTROL STOCKS, |
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| Online Access: | http://documents.worldbank.org/curated/en/2004/03/3573367/cross-listing-lead-functional-convergence-empirical-evidence
https://hdl.handle.net/10986/14302
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