Open AccessThe host-market valuation effect of foreign company cross-listings — the case of the Hong Kong market
Author(s) -
Mengmeng Ma,
Ronghua Yi,
Ying Yu,
Xiaoyang Yao
Publication year - 2020
Publication title -
journal of physics. conference series
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.21
H-Index - 85
eISSN - 1742-6596
pISSN - 1742-6588
DOI - 10.1088/1742-6596/1592/1/012072
Subject(s) - valuation (finance) , valuation effects , endogeneity , business , spillover effect , cross listing , regression analysis , financial economics , event study , economics , econometrics , finance , corporate governance , statistics , microeconomics , paleontology , context (archaeology) , mathematics , biology
This paper studies the valuation effect of time-varying and the difference between different markets of overseas companies cross-listing on the host market. Using the data of the Hong Kong market from 1991 to 2018, we adopt the event study method and multiple regression model to analyse the short- and long-term valuation effect, respectively. Furthermore, two-stage least squares (2SLS) regression are utilized to address the endogeneity. We find that the valuation of foreign company listings on the host market change with the duration and have a significant short-term positive spillover effect. However, the long-term spillover effect is related to the company’s home market. This study provides new insights into foreign cross-listing company valuation, offering a few implications for the establishment of a Chinese International Board.