Premium
Ownership of Cross–Listed Equities: An Investigation of Turnover, Diversification, and Risk
Author(s) -
Lau Sie Ting,
McInish Thomas H.
Publication year - 2003
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/1540-6288.00039
Subject(s) - diversification (marketing strategy) , business , systematic risk , monetary economics , shares outstanding , sample (material) , turnover , inventory turnover , financial economics , economics , finance , corporate governance , stock exchange , marketing , chemistry , chromatography , management , shareholder
Using data for a sample of Malaysian stocks that are traded in both Malaysia and Singapore, we show that the turnover rate (trading volume relative to shares held) is significantly higher in the foreign market than in the domestic market. We also find that ownership of cross–listed shares by foreign investors is not motivated by diversification benefits. Instead, we find that the proportion of a firm's shares held in Singapore is directly related to the firm's level of systematic risk.