DP2681 The Geography of Equity Listing: Why Do Companies List Abroad?
|Author(s):||Marco Pagano, Ailsa A Röell, Josef Zechner|
|Publication Date:||January 2001|
|Keyword(s):||Cross-Listings, Geography, Going Public, Initial Public Offerings|
|JEL(s):||G15, G30, G39|
|Programme Areas:||Financial Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=2681|
This Paper documents the aggregate trends in the foreign listings of companies and analyses both their distinctive pre-listing characteristics and their post-listing performance relative to other companies. In the 1986-97 interval, many European companies listed abroad, but did so mainly on US exchanges. At the same time, the number of US companies listed in Europe decreased. The cross-listings of European companies appear to have sharply different motivations and consequences depending on whether they cross-list in the United States or within Europe. In the first case, companies pursue a strategy of rapid expansion and large equity issues after the listing. They rely increasingly on export markets and tend to belong to high-tech industries. In the second case, companies do not grow more than the control group, and increase their leverage after the cross-listing. The only features common to all cross-listing companies are their large size and their tendency to be recently privatized companies.