Cross Listing and Subsequent Delisting in Foreign Markets

Posted: 11 Mar 2009

See all articles by Leyuan You

Leyuan You

University of Alaska Anchorage

Ali Parhizgari

Florida International University

Suresh C. Srivastava

University of Alaska at Anchorage

Date Written: March 9, 2009

Abstract

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.

Keywords: Foreign listing, foreign delisting, event study, bonding hypothesis

JEL Classification: G14, G15

Suggested Citation

You, Leyuan and Parhizgari, Ali and Srivastava, Suresh, Cross Listing and Subsequent Delisting in Foreign Markets (March 9, 2009). Available at SSRN: https://ssrn.com/abstract=1356201

Leyuan You (Contact Author)

University of Alaska Anchorage ( email )

3211 Providence Drive
Anchorage, AK 99508
United States

Ali Parhizgari

Florida International University ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Suresh Srivastava

University of Alaska at Anchorage ( email )

3211 Providence Drive
Anchorage, AK 99508
United States
907-786-4148 (Phone)
907-786-4115 (Fax)

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