Cost of capital effects and changes in growth expectations around US cross-listings

• 成果类型: Article
• 署名作者: Hail, Luzi; Leuz, Christian
• 署名单位: University of Chicago; University of Pennsylvania
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.09.006
• 发表日期: 2009
• 页码: 428-454
• 关键词: CORPORATE GOVERNANCE; Bonding hypothesis; Cost of equity; law and finance; International finance

摘要

This paper examines whether cross-listing in the U.S. reduces firms' costs of capital. We estimate cost of capital effects implied by market prices and analyst forecasts, which accounts for changes in growth expectations around cross-listings. Firms with cross-listings on U.S. exchanges experience a decrease in their cost of capital between 70 and 120 basis points. These effects are sustained and exist after the Sarbanes-Oxley Act. We find smaller reductions for cross-listings in the over-the-counter market and for exchange-listings from countries with stronger legal institutions. For exchange-traded cross-listings, the cost of capital reduction accounts for over half of the increase in firm value, where as for other types of cross-listings the valuation effects are primarily attributable to contemporaneous revisions in growth expectations. (C) 2009 Elsevier B.V. All rights reserved.