Does Cross-Listing Lead to Functional Convergence? Empirical Evidence

The author examines the effect of legal bonding on ownership and control structures of foreign firms cross-listing in the United States. Contrary to the predictions of corporate governance convergence theories, there is little evidence of convergen...

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Main Author:	Ayyagari, Meghana
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	AUDIT COMMITTEES BENCHMARK CAPITAL MARKETS COMPANY CONTROL SHARE CONVERGENCE HYPOTHESIS CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORPORATION CORPORATIONS COST OF CAPITAL DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EXPROPRIATION FIRM SIZE FIRMS FORECASTS FOREIGN COMPANIES FOREIGN FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FUTURE RESEARCH GOING PUBLIC GROWTH RATE LIQUIDITY LISTED COMPANIES NASDAQ NETWORK EXTERNALITIES NYSE OTC OWNERSHIP STRUCTURE PROFITABILITY ROE SHAREHOLDERS SHAREHOLDINGS STATEMENTS SUNK COSTS TIME SERIES TRANSPARENCY TRUSTS VALUATION WEALTH CORPORATE GOVERNANCE OWNERSHIP DEPOSITORY RECEIPTS FINANCIAL POLICIES CAPITAL STRUCTURE STOCK MARKETS MARKET VALUE CONTROL STOCKS
Online Access:	http://documents.worldbank.org/curated/en/2004/03/3573367/cross-listing-lead-functional-convergence-empirical-evidence http://hdl.handle.net/10986/14302

id	okr-10986-14302
recordtype	oai_dc
spelling	okr-10986-143022021-04-23T14:03:20Z Does Cross-Listing Lead to Functional Convergence? Empirical Evidence Ayyagari, Meghana AUDIT COMMITTEES BENCHMARK CAPITAL MARKETS COMPANY CONTROL SHARE CONVERGENCE HYPOTHESIS CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORPORATION CORPORATIONS COST OF CAPITAL DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EXPROPRIATION FIRM SIZE FIRMS FORECASTS FOREIGN COMPANIES FOREIGN FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FUTURE RESEARCH GOING PUBLIC GROWTH RATE LIQUIDITY LISTED COMPANIES NASDAQ NETWORK EXTERNALITIES NYSE OTC OWNERSHIP STRUCTURE PROFITABILITY ROE SHAREHOLDERS SHAREHOLDINGS STATEMENTS SUNK COSTS TIME SERIES TRANSPARENCY TRUSTS VALUATION WEALTH CORPORATE GOVERNANCE OWNERSHIP DEPOSITORY RECEIPTS FINANCIAL POLICIES CAPITAL STRUCTURE STOCK MARKETS MARKET VALUE CONTROL STOCKS The author examines the effect of legal bonding on ownership and control structures of foreign firms cross-listing in the United States. Contrary to the predictions of corporate governance convergence theories, there is little evidence of convergence-related migration to a dispersed ownership structure on cross-listing. She finds that rather than as a means to change their governance structure, foreign firms use American Depository Receipts as a vehicle to sell control blocks, often to a new foreign owner. Firms that cross-list and sell stakes to domestic owners are from large economies with high stock market liquidity. In contrast, firm-level characteristics are more important predictors of a control change to a foreign owner. Cross-listing firms that sell control blocks to foreigners tend to be smaller, have low levels of debt, and have a high foreign income growth rate. The post cross-listing performance of firms that undergo a control change is also different from firms that do not experience a control change. 2013-07-01T15:49:55Z 2013-07-01T15:49:55Z 2004-04 http://documents.worldbank.org/curated/en/2004/03/3573367/cross-listing-lead-functional-convergence-empirical-evidence http://hdl.handle.net/10986/14302 English en_US Policy Research Working Paper;No.3264 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AUDIT COMMITTEES BENCHMARK CAPITAL MARKETS COMPANY CONTROL SHARE CONVERGENCE HYPOTHESIS CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORPORATION CORPORATIONS COST OF CAPITAL DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EXPROPRIATION FIRM SIZE FIRMS FORECASTS FOREIGN COMPANIES FOREIGN FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FUTURE RESEARCH GOING PUBLIC GROWTH RATE LIQUIDITY LISTED COMPANIES NASDAQ NETWORK EXTERNALITIES NYSE OTC OWNERSHIP STRUCTURE PROFITABILITY ROE SHAREHOLDERS SHAREHOLDINGS STATEMENTS SUNK COSTS TIME SERIES TRANSPARENCY TRUSTS VALUATION WEALTH CORPORATE GOVERNANCE OWNERSHIP DEPOSITORY RECEIPTS FINANCIAL POLICIES CAPITAL STRUCTURE STOCK MARKETS MARKET VALUE CONTROL STOCKS
spellingShingle	AUDIT COMMITTEES BENCHMARK CAPITAL MARKETS COMPANY CONTROL SHARE CONVERGENCE HYPOTHESIS CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORPORATION CORPORATIONS COST OF CAPITAL DEBT DISCLOSURE DISCLOSURE REQUIREMENTS EXPROPRIATION FIRM SIZE FIRMS FORECASTS FOREIGN COMPANIES FOREIGN FIRMS FOREIGN INVESTORS FOREIGN SHAREHOLDERS FUTURE RESEARCH GOING PUBLIC GROWTH RATE LIQUIDITY LISTED COMPANIES NASDAQ NETWORK EXTERNALITIES NYSE OTC OWNERSHIP STRUCTURE PROFITABILITY ROE SHAREHOLDERS SHAREHOLDINGS STATEMENTS SUNK COSTS TIME SERIES TRANSPARENCY TRUSTS VALUATION WEALTH CORPORATE GOVERNANCE OWNERSHIP DEPOSITORY RECEIPTS FINANCIAL POLICIES CAPITAL STRUCTURE STOCK MARKETS MARKET VALUE CONTROL STOCKS Ayyagari, Meghana Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
relation	Policy Research Working Paper;No.3264
description	The author examines the effect of legal bonding on ownership and control structures of foreign firms cross-listing in the United States. Contrary to the predictions of corporate governance convergence theories, there is little evidence of convergence-related migration to a dispersed ownership structure on cross-listing. She finds that rather than as a means to change their governance structure, foreign firms use American Depository Receipts as a vehicle to sell control blocks, often to a new foreign owner. Firms that cross-list and sell stakes to domestic owners are from large economies with high stock market liquidity. In contrast, firm-level characteristics are more important predictors of a control change to a foreign owner. Cross-listing firms that sell control blocks to foreigners tend to be smaller, have low levels of debt, and have a high foreign income growth rate. The post cross-listing performance of firms that undergo a control change is also different from firms that do not experience a control change.
format	Publications & Research :: Policy Research Working Paper
author	Ayyagari, Meghana
author_facet	Ayyagari, Meghana
author_sort	Ayyagari, Meghana
title	Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
title_short	Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
title_full	Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
title_fullStr	Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
title_full_unstemmed	Does Cross-Listing Lead to Functional Convergence? Empirical Evidence
title_sort	does cross-listing lead to functional convergence? empirical evidence
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2004/03/3573367/cross-listing-lead-functional-convergence-empirical-evidence http://hdl.handle.net/10986/14302
_version_	1764430177871331328

Does Cross-Listing Lead to Functional Convergence? Empirical Evidence

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