What is the Effect of Cross-Listing on Corporate Ownership and Control?

Download or read book What is the Effect of Cross-Listing on Corporate Ownership and Control? written by Craig Doidge and published by . This book was released on 2011 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether and how ownership structure changes when firms from emerging markets cross-list their shares on a U.S. stock exchange. Prior to listing in the U.S., firms have controlling shareholders. After listing, controlling shareholders of firms that do their IPO in the U.S. significantly reduce their holdings. However, controlling shareholders of most other firms do not. In addition, there is a change in control in 26% of the firms. As a result, there is a decrease in the number of firms that are controlled by families and partnerships and an increase in the number of firms that are controlled by foreign public corporations. The abnormal return around the announcement of a control change is 6.31%. The results suggest that ownership shifts to controlling shareholders that place a lower value on private control benefits.