Does International Cross-Listing Improve the Information Environment? PDF Download
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Author: Nuno Fernandes
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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Book Description
We investigate whether cross-listing in the U.S. affects the information environment for non-U.S. stocks. Our findings suggest cross-listing has an asymmetric impact on stock price informativeness around the world, as measured by firm-specific stock return variation. Cross-listing improves price informativeness for developed market firms. For firms in emerging markets, however, cross-listing decreases price informativeness. We also find that price informativeness increases the most for firms in countries with the greatest investor protection. The added analyst coverage associated with cross-listing likely explains the findings in emerging markets, rather than changes in liquidity, ownership, or accounting quality. Our results indicate that the added analyst coverage fosters the production of marketwide information, rather than firm-specific information.
Author: Nuno Fernandes
Publisher:
ISBN:
Category :
Languages : en
Pages : 53
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Book Description
We investigate whether cross-listing in the U.S. affects the information environment for non-U.S. stocks. Our findings suggest cross-listing has an asymmetric impact on stock price informativeness around the world, as measured by firm-specific stock return variation. Cross-listing improves price informativeness for developed market firms. For firms in emerging markets, however, cross-listing decreases price informativeness. We also find that price informativeness increases the most for firms in countries with the greatest investor protection. The added analyst coverage associated with cross-listing likely explains the findings in emerging markets, rather than changes in liquidity, ownership, or accounting quality. Our results indicate that the added analyst coverage fosters the production of marketwide information, rather than firm-specific information.
Author: Mark H. Lang
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
This paper investigates the relation between cross listing in the U.S., with its resulting commitment to increased disclosure, and the information environment of non-U.S. firms. We find that firms that cross-list on U.S. exchanges have greater analyst coverage and increased forecast accuracy relative to firms that are not cross listed. A time-series analysis shows that the change in analyst coverage and forecast accuracy occurs around cross listing. We also document that firms that have more analyst coverage and higher forecast accuracy have a higher valuation. Further, the change in firm value around cross listing is correlated with changes in the firm's information environment. Our findings support the hypothesis that cross-listed firms have better information environments, which are associated with higher market valuations.
Author: Olga Dodd
Publisher:
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
An improvement in a firm's information environment is one possible benefit of cross-listing a firm's shares. We empirically examine the changes in the information asymmetry and informational efficiency of prices of cross-listed stocks in their home market around a firm's cross-listing in the US. Using intraday stock trading data we estimate market microstructure measures of information asymmetry, including the effective spread, information asymmetry components of the spread and price impact, and intraday stock return autocorrelation as a measure of price efficiency. Our results suggest that cross-listing in the US is associated with a significant improvement in the quality of the firm's information environment and stock price efficiency in the home market. The improvement in the information environment is stronger for cross-listings that take place after the adoption of the Sarbanes-Oxley Act in the US in 2002. Overall, our results provide broad support for the legal and reputational bonding hypotheses and demonstrate that stricter disclosure associated with a US cross-listing is beneficial.
Author: Moses Wisdom Chisadza
Publisher: Anchor Academic Publishing (aap_verlag)
ISBN: 3954892219
Category : Social Science
Languages : en
Pages : 117
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Book Description
This book looks at contemporary issues facing financial markets in Southern Africa. It has been established that African stock markets are confronted with a multitude of problems which include inadequate liquidity, low capitalisation, few market participants, a small number of listed companies and low trading volumes. As a result, their broader economic impact has so far been limited. The Southern Africa Development Community (‘SADC’) stock markets, with the exception of South Africa, are small both in terms of the number of listed companies and market capitalisation, and they display considerable illiquidity. In general, the SADC region has shallow and underdeveloped financial markets. Their development has been hampered by a number of factors which include; political and economic uncertainty, fiscal dominance, weak judicial institutions, limited investment opportunities in the private sector, technological constraints, and the shortage of skilled personnel with expertise in banking and finance.
Author: Shinhua Liu
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
International cross-listing should subject stocks involved to ameliorated information environment in the host market, resulting in more information being revealed, fed back, and impounded into their prices at home and, thus, higher home-market pricing efficiency. Employing a simple nonparametric test, we present the first large-sample evidence for this hypothesis, and document that foreign cross-listings in the U.S. indeed enhance home-market stock pricing efficiency, net of marketwide efficiency shifts in the concurrent period. In addition, the efficiency benefit applies equally well regardless of home-market development status or cross-listing location. These findings should be of interest to both academics and practioners.
Author: Joseph P. H. Fan
Publisher: University of Chicago Press
ISBN: 0226237249
Category : Business & Economics
Languages : en
Pages : 401
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Book Description
La 4e de couverture indique : "Despite a vast accumulation of private capital, China is not embracing capitalism. Deceptively familiar capitalist features disguise the profoundly unfamiliar foundations of "market socialism with Chinese characteristics." The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs), and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin's Commanding Heights. The chapters in this volume examine China's high savings rate, banking system, financial markets, financial regulations, corporate governance, and public finances; and consider policy alternatives the CCP might consider if its goal is China's elevation into the ranks of high income countries."
Author: Dr. Emmanuel Asoluka Ihejirika
Publisher: Lulu.com
ISBN: 1483426718
Category : Business & Economics
Languages : en
Pages : 141
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Book Description
As a classical empirical research study, the author investigated whether foreign investment into the U.S are hindered by SOX act, high compliance cost or high stock listing cost in NYSE and NASDAQ exchanges. This book is a practical and excellent resource for graduate academic research in business, showing how research methodology design and variables are operationalized. This book will benefit African firms and global investors listing shares overseas, including in U.S using Depositary Receipts (DRs). The increasing demand for Depositary Receipts is driven by the desire of individual and institutional investors to diversify their portfolios, reduce risk and invest internationally. While most investors recognize the benefits of global diversification, they also understand the challenges presented when investing directly in local trading markets. These obstacles can include inefficient trade settlements, uncertain custody services and costly currency conversions.
Author: Ross P. Buckley
Publisher: Cambridge University Press
ISBN: 1107100933
Category : Business & Economics
Languages : en
Pages : 485
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Book Description
Taking stock of the 2008 global financial crisis, this book provides 'outside the box' solutions for reforming international financial regulation.
Author: Richard Podpiera
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We investigate the effects of market fragmentation and information flows in the case of stocks cross-listed on markets in Central Europe and London. First, we test for co-movement, interaction and error correction behavior between the local and London markets. Our results suggest that strong interactions exist between these markets, with the London market being slightly more important than the local one. The two prices of cross-listed stocks are cointegrated and pricing errors are corrected over a few days. These interactions suggest partial fragmentation. Second, we extend an earlier model to examine the impact of foreign listing on the variance of local returns. The focus of previous studies has concentrated almost exclusively on the return of cross-listed securities. The variance of returns has remained mostly unnoticed, even though some studies noted an increase of variance after the cross-listing. In our model, we introduce a new factor that influences return variance: tighter interaction with foreign markets as a consequence of cross-listing. Estimation results lend support to our model.
Author: Ms.Hali J. Edison
Publisher: International Monetary Fund
ISBN: 1451875703
Category : Business & Economics
Languages : en
Pages : 44
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Book Description
We analyze capital flows to emerging markets in a framework that incorporates two quantitative measures of financial integration, the intensity of capital controls and the extent of cross border listings, while controlling for traditional global (push) and country specific (pull) factors. Two important results emerge. First, the cross listing of an emerging market firm on a U.S. exchange is an important but short lived capital flows event, suggesting that the cross listed stock is in effect a new security that U.S. investors quickly bring into their portfolios. Second, the effect of financial liberalization on capital flows is more nuanced than is suggested by event studies: A reduction in capital controls results in increased inflows only when the controls are binding. Among the standard push and pull factors, global factors are important-slack U.S. economic activity is associated with increased flows to emerging markets-and U.S. investors appear to chase expected, but not past, returns.
