Shareholders’ Wealth Effects of International Cross-Listings
This study evaluates shareholders’ wealth effects of international cross-listings and the joint significance of different theories in explaining American, British, and European cross-listing benefits. Moreover, it evaluates the time variation in shareholders’ wealth effects of cross-listings with a particular focus on the impact of significant developments in capital markets, such as adoption of the Sarbanes-Oxley Act in the US and single currency euro in Europe. The findings confirm that the impact of a cross-listing on shareholders’ wealth depends on the destination market and the time when it takes place. Changes in listing environment not only alter the wealth effects of cross-listings but also affect the sources of value creation around cross-listings. Overall, the findings provide insights into the nature of the motivations and the benefits of cross-listings across different host markets and over time.