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.