Firm Value and Cross Listings: The Impact of Stock Market Prestige
AbstractThis study investigates the valuation impact of a firm’s decision to cross list on a more (or less) prestigious stock exchange relative to its own domestic market. We use a network analysis methodology to derive broad market-based measures of prestige for 45 country or regional stock exchange destinations between 1990 and 2006. We find that firms cross listing in a more prestigious market enjoy significant valuation gains over the five-year period following the listing. In contrast, firms cross listing in less prestigious markets experience a significant valuation discount over this post-listing period. The reputation of the cross-border listing destinations is therefore a useful signal of firm value going forward. Our findings are consistent with the view that cross listing in a prestigious market enhances firm visibility, strengthens corporate governance, and lowers informational frictions and capital costs. View Full-Text
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Cetorelli, N.; Peristiani, S. Firm Value and Cross Listings: The Impact of Stock Market Prestige. J. Risk Financial Manag. 2015, 8, 150-180.
Cetorelli N, Peristiani S. Firm Value and Cross Listings: The Impact of Stock Market Prestige. Journal of Risk and Financial Management. 2015; 8(1):150-180.Chicago/Turabian Style
Cetorelli, Nicola; Peristiani, Stavros. 2015. "Firm Value and Cross Listings: The Impact of Stock Market Prestige." J. Risk Financial Manag. 8, no. 1: 150-180.