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    The effects of International Equity Cross-Listing on Investor Protection and Firm Value


    O'Connor, Thomas G. (2007) The effects of International Equity Cross-Listing on Investor Protection and Firm Value. PhD thesis, National University of Ireland Maynooth.

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    Abstract

    In this thesis, I examine issues pertaining to equity cross-listing in the United States and the United Kingdom. Specifically, I examine two issues, namely the effects of an international equity cross-listing on domestic investor protection, and firm value. First, in Chapter 3, I examine the effects of listing in the U.S. on the level o f domestic investor protection for non-U.S. firms. Others have examined whether non- U.S. firms can ‘completely’ bond to the U.S. governance regime (like U.S. firms do), as the legal bonding hypothesis predicts. In general these studies conclude that bonding to the U.S. regime is ‘incomplete’. Implicit in this is the belief that domestic/ordinary shareholders are also protected, although this has not been examined. I explicitly examine this issue. My results suggest that the ordinary shareholders of non- U.S. cross-listed firms do enjoy additional protection under the U.S. governance regime. In the remainder o f the thesis, I examine die valuation effects o f listing abroad. I build upon the cross-sectional work of Doidge, Karolyi, and Stulz (2004) and Kristian-Hope, Kang, and Zang (2005), and examine the effects of listing abroad over time for Irish, Emerging, and both Emerging and Developed firms, respectively. My results suggest the following. In Chapter 4 I find that Irish firms that exchange cross-list experience an increase in value after listing abroad. This contrasts notably with the calendar year valuation discount reported by Doidge, Karolyi, and Stulz (2004) for Irish cross-listed firms. In contrast, Level 2/3 exchange-traded Emerging market firms are worth more than non-cross-listed firms in calendar time, but not necessarily in event time. The results outlined in Chapter 5 suggest that listing in the U.S. does not enhance value. After listing in the U.S., these firms are no longer worth more than non-crosslisted firms. Finally, in Chapters 6 and 7, I examine the valuation effects of listing for non-exchange traded issues. I find that trading in the U.S. via a non-exchange issue does not enhance value. The result holds irrespective of how I classify firms. Finally, I extend the later by examining the valuation effects of listing for non-exchange traded firms, on a country-by-country basis. I find that listing does enhance value for firms from certain countries.

    Item Type: Thesis (PhD)
    Keywords: International Equity; Investor Protection; Firm Value;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 5315
    Depositing User: IR eTheses
    Date Deposited: 14 Aug 2014 12:07
    URI:

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