The Banking and Finance Review

Cross-Listing Premium or Market Timing

Moustafa M Abuelfadl

Abstract


Cross listing literature presented various reasons for why companies cross list among those are liquidity, investor recognition, and lower cost of capital. This paper builds on the literature of cross-listing and shows that some companies cross list during a bull market expansion and others cross list in a bear market. We found that companies who cross list during market expansion, experience significantly negative abnormal returns in the post-listing period. Companies, who cross-list for other reasons and therefore cross list during a bear market, experience either significant positive abnormal returns or insignificant negative abnormal returns in the post-listing period. Home country factors affect the magnitude of abnormal returns in both the pre-listing and the post-listing period regardless of the reason for cross-listing.


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