Cross-listing pursuit of unseasoned foreign firms after going public in the U.S.
Lee, Hei Wai
Cai, Nianyun (Kelly)
We examine a company's cross-listing decision with a unique sample of unseasoned foreign firms that went public in the U.S. and later cross-listed abroad. We find that these firms are motivated by their pursuit of global growth opportunities in both the capital and product markets. They strategically bond with the U.S. market through their U.S. IPOs to signal their commitment to increased shareholder protection, which facilitates their future capital raising efforts. Their higher quality is evidenced with characteristics of larger firm size, larger issue size, being prominent in their home countries, underwritten by prestigious underwriters, with lower issue costs and greater analysts' coverage than their non-cross-listing peers. Further analysis shows a positive valuation effect and increased liquidity for their U.S. shares around the cross-listing event. Additional findings suggest that foreign issuers seek cultural or geographical proximity when they further cross-list abroad.
Cross-listing Unseasoned foreign firms U.S. IPOs Bonding Liquidity Valuation
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