Cross Listing Behavior

This chapter provides a summary of international cross-listing behavior. It discusses the internal and external factors, which prompt firms to cross-list in the first instance, where to cross-list, and for some, cross-delist. It also examines the behavior of firms once they crosslist. Also discussed are capital raising and investment behavior, the behavior of controlling insiders once firms cross-list, and the effect of cross-listing behavior on firm value. The general conclusions suggest that internal factors predominantly explain cross-listing and delisting behavior. Large firms with sizable growth opportunities tend to cross-list. When these growth opportunities disappear, firms cross-delist. Proximity predominantly dictates where firms cross-list. Firms typically list in countries that are geographically, culturally, and economically close to their own. The behavior of controlling insiders is altered once firms cross-list as a result of legal and market-wide forces. Firm value increases as a result of cross-listing, but general disagreement exists about the durability of these valuation gains