Working Paper: CEPR ID: DP2683
Authors: Marco Pagano; Otto Randl; Ailsa A. Rell; Josef Zechner
Abstract: Despite the increasing integration of capital markets, geography has not yet become irrelevant to finance. Between 1986 and 1997, European public companies have increasingly listed abroad, especially in the US. We relate the cross-listing decisions to the characteristics of the destination exchanges (and countries) relative to those of the home exchange (and country). European companies appear more likely to cross-list in more liquid and larger markets, and in markets where several companies from their industry are already cross-listed. They are also more likely to cross-list in countries with better investor protection, and more efficient courts and bureaucracy, but not with more stringent accounting standards.
Keywords: crosslistings; geography; going public; initial public offerings; stock market competition
JEL Codes: F23; F36; G15; G30; G39
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Market liquidity (G19) | Crosslisting likelihood (C59) |
| Market size (L25) | Crosslisting likelihood (C59) |
| Average trading costs on destination exchanges (F31) | Crosslisting likelihood (C59) |
| Presence of other companies in the same industry (L19) | Crosslisting likelihood (C59) |
| Quality of legal frameworks (K40) | Crosslisting likelihood (C59) |
| Differences in accounting standards (M48) | Crosslisting likelihood (C59) |