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Cross Listing Performance And Insider Ownership
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Book Synopsis Cross-Listing Performance and Insider Ownership by : Omar A. Esqueda
Download or read book Cross-Listing Performance and Insider Ownership written by Omar A. Esqueda and published by . This book was released on 2015 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Insider-owned firms pursue U.S. cross-listings following periods of extraordinary performance. However, the long-run post-cross-listing abnormal returns become negative only for insider-controlled cross-listings. We find that the Sarbanes-Oxley Act (SOX) has mitigated the market-timing attempts as negative abnormal returns are limited to the pre-SOX period, supporting a cross-listing bonding benefit after U.S. securities regulation was enhanced. In addition, investors anticipate future operating performance as stock returns incorporate forthcoming operating outcomes one and two years ahead. Whereas capital-raising cross-listings show better operating performance than non-capital-raising, the returns of capital-raising firms are more sensitive to the potential agency problems created by insider-ownership.
Book Synopsis Does Cross-Listing Mitigate Insider Trading? by : Adriana Korczak
Download or read book Does Cross-Listing Mitigate Insider Trading? written by Adriana Korczak and published by . This book was released on 2008 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether the increased legal and reputational constraints associated with cross-listing in the U.S. reduces the propensity of insiders to trade on private information. We find that the directors in both domestic and cross-listed firms trade on private information, particularly when they sell their holdings, as their trades generate negative and significant abnormal returns regardless of the cross-listing level, and the post-event returns in exchange-listed and OTC-listed firms where the regulation is expected to be less binding are relatively similar. We also show that the impact of the Sarbanes-Oxley Act (SOX) is limited. These results provide weak evidence for the impact of cross-listing on the propensity of insiders to trade on private information.
Book Synopsis The Long-Term Effects of Cross-Listing, Investor Recognition, and Ownership Structure on Valuation by : Michael R. King
Download or read book The Long-Term Effects of Cross-Listing, Investor Recognition, and Ownership Structure on Valuation written by Michael R. King and published by . This book was released on 2013 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The widening of a foreign firm's U.S. investor base and the improved information environment associated with cross-listing on a U.S. exchange are distinct effects. Valuations of Canadian firms peak in the year of cross-listing and fall monotonically thereafter, irregardless of the level of U.S. investor holdings or the ownership structure of the firm. Cross-listed firms with a 20%+ blockholder attract a similar number of U.S. institutional investors as widely-held firms on average, but experience a lower increase in valuation at high levels of investor recognition. While U.S. investors are less willing to invest in firms with dual-class shares, these firms benefit more from cross-listing even when they fail to widen their U.S. investor base, suggesting that the reduction in information asymmetry between controlling and minority investors has a separate impact on valuation for firms where agency problems are greatest.
Download or read book Look at Me Now written by and published by . This book was released on 2004 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: "We use a comprehensive 1997 survey to examine U.S. investors ̐preferences for foreign equities. We document a variety of firm characteristics that can influence U.S. investment, but the most important determinant is whether the stock is cross-listed on a U.S. exchange. Our selection bias-corrected estimates imply that firms that cross-list can increase their U.S. holdings by 8 to 11 percent of their market capitalization, roughly doubling the amount held without cross-listing. All else equal, we find that firms experience smaller increases in U.S. shareholdings upon cross-listing if they are Canadian, from English-speaking countries, are members of the MSCI World index, or had higher quality accounting standards prior to cross-listing. We argue that these findings suggest that improvements in information production explain U.S. investors ̐attraction to foreign stocks that cross-list in the United States"--Federal Reserve Board web site.
Book Synopsis Why Do U.S. Cross-listings Matter? by : John Ammer
Download or read book Why Do U.S. Cross-listings Matter? written by John Ammer and published by . This book was released on 2008 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the underlying determinants of home bias using a comprehensive sample of U.S. investor holdings of foreign stocks. We document that U.S. cross-listings are economically important, as U.S. ownership in a foreign firm roughly doubles upon cross-listing in the United States. We explore the cross-sectional variation in this "cross-listing effect" and show that increases in U.S. investment are largest in firms from weak accounting backgrounds and in firms that are otherwise informationally opaque, indicating that U.S. investors value the improvements in disclosure associated with cross-listing. We confirm that relative equity valuations rise for cross-listed stocks, and provide evidence suggesting that valuation increases are due in part to increases in U.S. shareholder demand and in part to the fact that the equities become more attractive to non-U.S. shareholders.
Book Synopsis The Long-term Effects of Cross-listing, Investor Recognition, and Ownership Structure on Valuation by : Michael R. King
Download or read book The Long-term Effects of Cross-listing, Investor Recognition, and Ownership Structure on Valuation written by Michael R. King and published by . This book was released on 2006 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors show that the widening of a foreign firm's U.S. investor base and the improved information environment associated with cross-listing on a U.S. exchange each have a separately identifiable effect on a firm's valuation. The increase in valuation associated with cross-listing is transitory, not permanent. Valuations of Canadian firms peak in the year of cross-listing and fall monotonically thereafter, regardless of the level of U.S. investor holdings or the ownership structure of the firm.
Book Synopsis Portfolio Preferences of Foreign Institutional Investors by : Reena Aggarwal
Download or read book Portfolio Preferences of Foreign Institutional Investors written by Reena Aggarwal and published by World Bank Publications. This book was released on 2003 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Does Cross-Listing Lead to Functional Convergence? Empirical Evidence by : Meghana Ayyagari
Download or read book Does Cross-Listing Lead to Functional Convergence? Empirical Evidence written by Meghana Ayyagari and published by . This book was released on 2016 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: The author examines the effect of legal bonding on ownership and control structures of foreign firms cross-listing in the United States. Contrary to the predictions of corporate governance convergence theories, there is little evidence of convergence-related migration to a dispersed ownership structure on cross-listing. She finds that rather than as a means to change their governance structure, foreign firms use American Depository Receipts as a vehicle to sell control blocks, often to a new foreign owner. Firms that cross-list and sell stakes to domestic owners are from large economies with high stock market liquidity. In contrast, firm-level characteristics are more important predictors of a control change to a foreign owner. Cross-listing firms that sell control blocks to foreigners tend to be smaller, have low levels of debt, and have a high foreign income growth rate. The post cross-listing performance of firms that undergo a control change is also different from firms that do not experience a control change.
Book Synopsis Competition and Co-Operation Among Exchanges by : Thomas J. Chemmanur
Download or read book Competition and Co-Operation Among Exchanges written by Thomas J. Chemmanur and published by . This book was released on 2012 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze firms' choice between exchanges to list their equity (including multiple listings), and exchanges' choice of listing standards for firms which apply for listing, in an environment of competition and co-operation among exchanges. We model an equity market characterized by asymmetric information, where outsiders can reduce their informational disadvantage relative to insiders by producing (noisy) information about firms at a cost. Exchanges are populated by two kinds of investors: sophisticated investors, with a cost advantage in producing information (low-cost investors), and ordinary investors, without such a cost-advantage (high-cost investors); the proportions of these two kinds of investors vary across exchanges. While firms are short-lived agents, exchanges are long-lived, value-maximizing agents, whose stringency in their listing and disclosure standards evolve over time. Exchanges also use their listing standards as a tool in competing with other exchanges for listings by firms. However, outsiders can partially infer the rigor of an exchange's listing policy by studying the subsequent performance of firms which have obtained listing there. The listing standards chosen by an exchange therefore affects its reputation. The listing choices of firms between exchanges, the valuation effects of listings on firm equity, and exchanges' listing standards emerge endogenously in equilibrium. Our model has implications for: the relationship between firm characteristics and the benefits from cross (and dual) listing; the price effects of cross listings; the relationship between cross listing and financial analyst following; the relationship between an exchange's reputation and its listing standards; the impact of competition on an exchange's listing standard; the impact of an alliance between exchanges on the listing standards of the allied exchange and of exchanges competing with it; and for the optimal regulation of exchanges.
Book Synopsis Does Cross-Listing in the US Improve Investment Efficiency? Evidence from UK Firms by : Abed Al-Nasser Abdallah
Download or read book Does Cross-Listing in the US Improve Investment Efficiency? Evidence from UK Firms written by Abed Al-Nasser Abdallah and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether managers of cross-listed firms improve corporate investment efficiency through learning from the stock market upon cross-listing. Using a sample of UK firms cross-listed on US regulated and unregulated stock markets, we find that cross-listed firms on unregulated markets invest more efficiently than non-cross-listed firms following cross-listing. Moreover, we find that cross-listed firms improve their investment efficiency post cross-listing. Furthermore, we find firms with low level of private information embedded in their stock prices, and firms with higher board independence improve their investment post cross-listing. Our findings suggest that managers of cross-listed firms are guided by firm-specific characteristic more than by stock market signals when they embark on new investment projects. We also find evidence that cross-listed firms on regulated exchanges perform poorly after cross-listing, whereas those cross-listed on unregulated exchange experience high performance post cross-listing.
Book Synopsis Cross Listing and Subsequent Delisting in Foreign Markets by : Leyuan You
Download or read book Cross Listing and Subsequent Delisting in Foreign Markets written by Leyuan You and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Employing a sample of stocks cross listed and subsequently delisted from foreign markets, we examine the consequences of delisting in terms of price, risk, volume, and liquidity. We also provide a direct comparison between the firm's performance due to foreign cross listing and its subsequent delisting. We find a positive cross listing and a negative delisting effect on stock price, both of which dissipate in the long run. No significant changes in the market risk are found for either case. Foreign cross listing and delisting are associated with increasing and decreasing long term trading volume respectively. Further, the bonding hypothesis fails to explain the listing premium and the delisting loss.
Book Synopsis Investment Intelligence from Insider Trading by : H. Nejat Seyhun
Download or read book Investment Intelligence from Insider Trading written by H. Nejat Seyhun and published by MIT Press. This book was released on 2000-02-28 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: Learn how to profit from information about insider trading. The term insider trading refers to the stock transactions of the officers, directors, and large shareholders of a firm. Many investors believe that corporate insiders, informed about their firms' prospects, buy and sell their own firm's stock at favorable times, reaping significant profits. Given the extra costs and risks of an active trading strategy, the key question for stock market investors is whether the publicly available insider-trading information can help them to outperform a simple passive index fund. Basing his insights on an exhaustive data set that captures information on all reported insider trading in all publicly held firms over the past twenty-one years—over one million transactions!—H. Nejat Seyhun shows how investors can use insider information to their advantage. He documents the magnitude and duration of the stock price movements following insider trading, determinants of insiders' profits, and the risks associated with imitating insider trading. He looks at the likely performance of individual firms and of the overall stock market, and compares the value of what one can learn from insider trading with commonly used measures of value such as price-earnings ratio, book-to-market ratio, and dividend yield.
Book Synopsis The Impact of Cross-Listing on the Home Market's Information Environment and Stock Price Efficiency by : Olga Dodd
Download or read book The Impact of Cross-Listing on the Home Market's Information Environment and Stock Price Efficiency written by Olga Dodd and published by . This book was released on 2016 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: An improvement in a firm's information environment is one possible benefit of cross-listing a firm's shares. We empirically examine the changes in the information asymmetry and informational efficiency of prices of cross-listed stocks in their home market around a firm's cross-listing in the US. Using intraday stock trading data we estimate market microstructure measures of information asymmetry, including the effective spread, information asymmetry components of the spread and price impact, and intraday stock return autocorrelation as a measure of price efficiency. Our results suggest that cross-listing in the US is associated with a significant improvement in the quality of the firm's information environment and stock price efficiency in the home market. The improvement in the information environment is stronger for cross-listings that take place after the adoption of the Sarbanes-Oxley Act in the US in 2002. Overall, our results provide broad support for the legal and reputational bonding hypotheses and demonstrate that stricter disclosure associated with a US cross-listing is beneficial.
Book Synopsis Firms' Choices to Cross-list Stocks on the U.S. and the U.K. Markets by : Jingwen Mu
Download or read book Firms' Choices to Cross-list Stocks on the U.S. and the U.K. Markets written by Jingwen Mu and published by . This book was released on 2014 with total page 319 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates some accounting issues that arise from firms' choices to cross-list stocks on the U.S. and the U.K. markets. Prior research shows that the benefits of cross-listing include a more liquid stock market, an increase in investor recognition, a decrease in the cost of capital, and a commitment to better corporate governance practices. However, the extent to which cross-listing can be used as an effective bonding mechanism is closely related to the choice of cross-listing destinations. Specifically, I hypothesise that differences in firm characteristics, accounting standards setting procedures, and the legal and regulatory environments between the U.S. and the U.K. markets lead to the expectation that firms cross-listed in the U.S. markets have better earnings quality than firms cross-listed in the U.K. In the context of this thesis, earnings quality refers to how precisely reported earnings convey a firm's true economic performance, and it is measured by models of accruals, earnings persistence and predictability, smoothness, and target beating. The results suggest the following. First, firms use accruals-based earnings management techniques to boost their earnings in the cross-listing year, but such evidence is only observed for firms cross-listed on the U.K markets. A further examination shows that, for the U.K. sample, the extent of earnings management is influenced by whether a firm raises new equity capital at cross-listing, while no such evidence is found for the U.S. sample. Second, the results provide mixed evidence that cross-listing firms have higher earnings quality than their home country counterparts that are not cross-listed. For firms cross-listed in the U.S., the differences in earnings quality are greater in the post-SOX period. Third, this thesis directly compares firms that choose between different cross-listing destinations and finds that firms cross-listed in the U.S. have higher earnings quality than firms cross-listed in the U.K. Fourth, home-country institutions are found to have a significant influence on cross-listing firms' reporting behaviour. The results are robust to controlling for innate factors known to affect the quality of earnings. Some interpretation issues arise when different measures of earnings quality are used, which shed light on future research directions.
Book Synopsis The Domestic Market Institutional Quality and Microstructure of Investor Recognition Benefits of Cross Listed Firms by : Adebiyi Sunday Adeyanju
Download or read book The Domestic Market Institutional Quality and Microstructure of Investor Recognition Benefits of Cross Listed Firms written by Adebiyi Sunday Adeyanju and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While cross listing is an integral part of firm visibility, no attention has been paid to domestic market institutional environment and microstructure of investor behaviour after financial market integration. This study examines the relationship between domestic market institutional quality and investor recognition of cross-listed firms from emerging markets countries. In contrast to post cross listing investor recognition assumption of fractional market model, using data cross-listed firms from BRICS bloc between 2000 to 2020. Our findings suggest that the domestic market institutional quality associated with larger improvement on investor recognition of cross-listed firms in a short-run (during the cross-listing year) and in a long-run (3years after the cross-listing year) in consistent with Merton (1987) investor recognition hypothesis (IRH) assertion. Our findings extend the significant of home country institutional environment on the investors heterogeneity in explaining market anomalies.
Book Synopsis The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance by : Alex Leum Han
Download or read book The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance written by Alex Leum Han and published by . This book was released on 2010 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Past academic research reports that post-IPO operating performance can be signaled through or explained by company characteristics in a period immediately preceding or following the IPO. This paper examines whether post-IPO operating performance is correlated with earnings management activities immediately preceding and following the IPO, insider ownership retention rates after the IPO, and percentage of insider ownership changes at the IPO. I also test whether aggressive earnings managers experience worse operating performance measured by operating income over total assets than conservative earnings managers. The results from various regression analyses and t-tests in this paper show that earnings management activities immediately preceding and following the IPO and insider ownership retention rates are not correlated with post-IPO operating performance. However, this paper reports a statistically negative relationship between percentage of insider ownership changes at the IPO and post-IPO operating performance in the issue year.
Book Synopsis Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors by : OECD
Download or read book Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors written by OECD and published by OECD Publishing. This book was released on 2011-07-01 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report reflects long-term, in-depth discussion and debate by participants in the Latin American Roundtable on Corporate Governance.
