Cross-Listing :: Business, Stock Exchange

Cross-listing derriere be defined as the listing of a companys sh atomic number 18s in a declivity exchange beyond its home country boundaries. It can also be termed as a secondary listing for firms those which are already listed in their home country. Typically, when companies grow bigger and diversify business, they prefer for cross-listing to raise capital from larger and more liquid foreign markets. In 2009, nearly 3100 firms cross listed their equity on major overseas stock exchanges globally (World Federation of Exchanges, 2010, list provided in appendix) . It is not only chased by companies from developed countries but companies from emerging countries are also actively participating. Some major global cross-listing destinations are New York communication channel Exchange, NASDAQ, capital of the United Kingdom Stock Exchange, Tokyo Stock Exchange, Shanghai Stock Exchange, and so on. The fall upon focus of this written report will be on examining the stock impairment r eaction and the patterns of returns before and after listing date for a several(a) sample of firms from different countries specifically in the case of London Stock Exchange (LSE). Existing literature has enough evidence that cross-listings on US exchanges are associated with considerable positive stock market reactions (Foerster and Karolyi, 1999 Miller, 1999). However, there has been special(a) research on the impact of cross-listing on non US exchanges. This serves as a primary motivation for my vex to explore and gain judgement on a stocks return in its home market as result of cross-listing on LSE. The rest of this paper is structured in the following manner. Section 2 provides a literature review, while voice 3 outlines the data, sample and research methodology. Section 4 presents the empirical results and its discussions. Finally, in section 5 I draw a conclusion.In this section, I present an overview of the existing literature that has been reviewed as a part of gaining an understanding on the extent of work that has already been done on the question of cross-listing and its impact on stock returns. Moreover, literature review was also subjective for understanding the statistical methodologies and approaches that I can apply in this paper for testing my hypothesis. Cross listing has been a topic of immense interest among researchers for a long time. There has been lot of developments as well as debate in the cross-listing literature on its different aspects such as motivation for companies to cross-list, whether cross-listing creates value, its impact on risk and return, its financial and economic impacts so on and so forth.