Cross Listing and Firm Value - Corporate Governance or Market Segmentation? An Empirical Study of the Stock Market
Author | : Andy G. Ji |
Publisher | : |
Total Pages | : 36 |
Release | : 2007 |
ISBN-10 | : OCLC:1290318453 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Cross Listing and Firm Value - Corporate Governance or Market Segmentation? An Empirical Study of the Stock Market written by Andy G. Ji and published by . This book was released on 2007 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the economic consequences of cross-listing on the Chinese stock market. We argue that by adopting a higher disclosure standard through cross-listing firms voluntarily commit themselves to reducing information asymmetry. As a result, cross-listed firms are able to benefit from growth opportunities with less appropriated cash flow and lower cost of capital. The empirical evidence shows that cross-listed firms indeed command higher valuations than their non-cross-listed counterparts, after controlling for certain firm-specific attributes. This lends support to the corporate governance hypothesis of cross-listing on the Chinese stock market. The study also argues that an overall upgrading of accounting standards cannot substitute for the cross-listing mechanism.