The Listing and Delisting of German Firms on NYSE and NASDAQ: Were There Any Benefits?

50 Pages Posted: 16 Sep 2011 Last revised: 30 Aug 2014

See all articles by Wolfgang Bessler

Wolfgang Bessler

University of Hamburg

Fred R. Kaen

University of New Hampshire - Department of Accounting & Finance

Philipp Kurmann

University of Giessen - Center for Finance and Banking

Jan Zimmermann

Justus-Liebig-University Giessen

Date Written: April 15, 2011

Abstract

We examine the NYSE and NASDAQ listing and delisting decisions of German companies in the context of the market segmentation and bonding theories. Both theories explicitly or implicitly assume that cross listing resulted in lower costs of capital and higher market valuations for the firms. However, using the same or similar research methods employed by those who have investigated and tested these theories, we find no systemic evidence that the German companies experienced reductions in their cost of capital or increases in their market values as a result of the cross listings. Our overall conclusion is that no significant valuation benefits were associated with the cross listings and that once Rule 12h-6 was adopted that enabled firms to delist without continuing to be subject to SEC regulations, many did so. Contributing to these decisions were changes in German corporate governance laws and the emergence of alternative trading platforms.

Keywords: Cross Listing, Delisting, Market Segmentation, Bonding Theories

JEL Classification: G15, G18, G30

Suggested Citation

Bessler, Wolfgang and Kaen, Fred R. and Kurmann, Philipp and Zimmermann, Jan, The Listing and Delisting of German Firms on NYSE and NASDAQ: Were There Any Benefits? (April 15, 2011). Journal of International Financial Markets, Institutions and Money, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1928784 or http://dx.doi.org/10.2139/ssrn.1928784

Wolfgang Bessler (Contact Author)

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

Fred R. Kaen

University of New Hampshire - Department of Accounting & Finance ( email )

Durham, NH 03824
United States
603-862-3354 (Phone)
603-862-4468 (Fax)

Philipp Kurmann

University of Giessen - Center for Finance and Banking ( email )

Licher Strasse 74
Giessen, D-35394
Germany

Jan Zimmermann

Justus-Liebig-University Giessen ( email )

Center for Finance and Banking
Licher Strasse 74
Giessen, 35394
Germany
+49-641-9922464 (Phone)
+49-641-9922469 (Fax)

HOME PAGE: http://wiwi.uni-giessen.de/home/Bessler/

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