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| Content Provider | Springer Nature Link |
|---|---|
| Author | Bahlous, Mejda |
| Copyright Year | 2013 |
| Abstract | The goal of this study is to estimate the impact of cross-listing on stock returns, on liquidity, and on risk. A sample of 24 companies from the Gulf Cooperation Council countries which cross-listed their stocks in a foreign market over the period 2000–2010 were chosen for study. An event study estimating abnormal returns related to the cross-listing event as well as parametric and nonparametric tests find that there is (1) a significant abnormal return of about 6 % that lasts until 6 days after the cross-listing day and starts fading away thereafter (2) a significant increase in liquidity during the event period for most firms and (3) on average a decrease in risk. Our results also suggest that cross-listing had a small impact on market risk measured by the average beta but led to a decrease in the total risk measured by standard deviation of returns and a decrease in the potential loss measured by the average value at risk at the 5 % confidence. Additionally, an analysis based on the foreign market of secondary listing suggests that the benefit of cross-listing varies with the market of secondary listing. The positive abnormal return is more obvious for companies that cross-listed in Kuwait, Bahrain, and London. The most obvious increase in liquidity is for firms that cross-listed in London or in Bahrain and the biggest decrease in risk is for companies that cross-listed in London. We conclude overall that cross-listing in London benefits the shareholders the most as it leads to positive significant abnormal returns, an increase in liquidity, and a decrease in risk. |
| Starting Page | 345 |
| Ending Page | 381 |
| Page Count | 37 |
| File Format | |
| ISSN | 13872834 |
| Journal | Asia-Pacific Financial Markets |
| Volume Number | 20 |
| Issue Number | 4 |
| e-ISSN | 15736946 |
| Language | English |
| Publisher | Springer Japan |
| Publisher Date | 2013-04-17 |
| Publisher Place | Tokyo |
| Access Restriction | One Nation One Subscription (ONOS) |
| Subject Keyword | Asymmetry of information Agency costs Bonding theory Cross-listing Segmented markets Liquidity measures Value at risk Volatility Finance/Investment/Banking Financial Economics International Economics Econometrics Economic Theory |
| Content Type | Text |
| Resource Type | Article |
| Subject | Finance |
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