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Cross‐Listing, Bonding Hypothesis and Corporate Governance
Author(s) -
Charitou Andreas,
Louca Christodoulos,
Panayides Stelios
Publication year - 2007
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.2007.02021.x
Subject(s) - cross listing , accounting , corporate governance , business , stock exchange , listing (finance) , audit committee , audit , valuation (finance) , stock (firearms) , sample (material) , finance , mechanical engineering , chemistry , chromatography , engineering
This paper examines the relationship between cross‐listing and corporate governance for Canadian firms, that were cross‐listed on US stock exchanges during the period 1997–2003. We find that cross‐listed firms have more independent boards and audit committees after the listing relative to a non‐cross‐listed matched sample of firms and relative to the pre‐listing period. Moreover, cross‐listed firms experience changes in their ownership structure after the listing. Finally, we provide evidence that the sensitivity of the relation between cross‐listed firm valuation with audit committee independence and ownership structure becomes more important after the listing. The results are robust after adjusting for various firm risk characteristics. Overall, the results are consistent with the literature on the bonding role of cross‐listings on US stock exchanges.