Corporate Governance Reforms and Cross-Listings: International Evidence*

• 成果类型: Article
• 署名作者: Liao, Chih-Hsien; Tsang, Albert; Wang, Kun Tracy; Zhu, Nathan Zhenghang
• 署名单位: National Taiwan University; Hong Kong Polytechnic University; Australian National University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12729
• 发表日期: 2022
• 页码: 537-576
• 关键词: MANDATORY IFRS ADOPTION; HOME BIAS; Investor protection; Financial dependence; earnings management; MARKET-SEGMENTATION; capital-markets; stock exchanges; Board structure; US

摘要

In this study, we examine whether a country's implementation of major corporate governance reforms affects firms' cross-listing activities. Cross-listing is important in overcoming international investment barriers and thus it is worth investigating whether enhanced corporate governance at the country level contributes to the integration of international capital markets. Using a difference-in-differences research design, we predict and find that following the implementation of corporate governance reforms in their home countries, firms are more likely to engage in cross-listing activities and tend to cross-list in host countries with stronger investor protection and more developed markets than those in countries with no reforms in the same period. The results from country-level cross-sectional tests indicate that this effect is greater for firms in home countries with weaker investor protection and less developed stock markets in the prereform period. The reforms also have a stronger effect on firms subject to less analyst following and greater external finance dependence. Finally, we find a stronger association between cross-listing activities and institutional ownership after the reforms. Taken together, this study increases understanding of the trade-off between cross-border capital supply and demand. Our finding suggests that country-level corporate governance plays an important role in facilitating the supply of cross-border capital, which in turn incentivizes firms to cross-list. Our study also offers policy implications for national stock exchanges and securities regulators by suggesting that countries without well-developed capital markets should strengthen their corporate governance to improve firms' ability to raise external financing and attract cross-border capital flows.