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Title:The dark side of international cross-listing: effects on rival firms at home PDF Logo
Authors:Melvin, Michael
Valero, Magali
Issue Date:2007
Series/Report no.:CESifo working paper 2174
Abstract:We analyze the stock price impact of firms’ U.S. cross-listing on home-market rival firms. Using an empirical event study approach we find negative cumulative average abnormal returns for the rival firms. The evidence suggests that the dominant effect is that investors see rivals as at a relative disadvantage to the listing firm. As firms cross-list in the US and commit to the increased disclosure and investor protection associated with the US listing, they are better able to take advantage of growth opportunities relative to their non cross-listing counterparts, and this results in negative spillover effects on rival firms.
Subjects:cross-listings
rival firms
growth opportunities
JEL:G15
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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