The Impact of Cross-Listing on the Corporate Information Environment: Further Evidence

30 Pages Posted: 15 Feb 2010

See all articles by Abed Al-Nasser Abdallah

Abed Al-Nasser Abdallah

American University of Sharjah

Peter F. Pope

Bocconi University; London School of Economics and Political Science

Date Written: February 11, 2010

Abstract

We explore the impact of cross-listing on the information environment of publicly traded companies. Compared to non-cross-listed companies, we find that cross-listed firms already have higher levels of information dissemination, as measured by the number of analyst, which increase after cross-listing. However, this increase does not continue after the third year of the post-cross listing period; this short period year-to-year increase in analyst following is robust for AMEX, NASDAQ, NYSE, LSE, and OTC, but not for PORTAL. Meanwhile, there is no change in the quantity of this information, as measured by analysts’ earnings forecasts, compared to non–cross-listed firms. Nonetheless, we find that the precision of analysts’ earnings forecasts increases during the first year prior to the cross-listing year, which provides cross-listed firms with an advantage over their non-cross-listed counterparts. The results are the same for all exchanges, except for OTC. Different from Lang et al. (2003), our results suggest that the event of cross-listing per see is what matters to firms, and not their commitment to increase the level of information disclosure. We are the first to produce such evidence, which contributes to the current debate on cross-listing, disclosure and investor protection.

Keywords: Cross-Listing, Disclosure, Investor Protection, Analyst Following, Analyst Forecast Error

JEL Classification: G14, G15, G18, G32

Suggested Citation

Abdallah, Abed Al-Nasser and Pope, Peter F., The Impact of Cross-Listing on the Corporate Information Environment: Further Evidence (February 11, 2010). Available at SSRN: https://ssrn.com/abstract=1551643 or http://dx.doi.org/10.2139/ssrn.1551643

Abed Al-Nasser Abdallah (Contact Author)

American University of Sharjah ( email )

United Arab Emirates
+971 6 515 2594 (Phone)

Peter F. Pope

Bocconi University ( email )

Dept of Accounting
Milan, 20136
Italy

London School of Economics and Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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