Firm Value and Cross Listings: The Impact of Stock Market PrestigeReport as inadecuate




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Federal Reserve Bank of New York, 33 Liberty Street, Main 3, New York, NY 10045, USA





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Academic Editor: Christian Brownlees

Abstract This study investigates the valuation impact of a firm’s decision to cross list on a more or less prestigious stock exchange relative to its own domestic market. We use a network analysis methodology to derive broad market-based measures of prestige for 45 country or regional stock exchange destinations between 1990 and 2006. We find that firms cross listing in a more prestigious market enjoy significant valuation gains over the five-year period following the listing. In contrast, firms cross listing in less prestigious markets experience a significant valuation discount over this post-listing period. The reputation of the cross-border listing destinations is therefore a useful signal of firm value going forward. Our findings are consistent with the view that cross listing in a prestigious market enhances firm visibility, strengthens corporate governance, and lowers informational frictions and capital costs. View Full-Text

Keywords: cross-listings; network analysis cross-listings; network analysis





Author: Nicola Cetorelli * and Stavros Peristiani

Source: http://mdpi.com/



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