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Cross‐Listings and M&A Activity: Transatlantic Evidence
Author(s) -
Tolmunen Pasi,
Torstila Sami
Publication year - 2005
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/j.1755-053x.2005.tb00094.x
Subject(s) - equity (law) , cross listing , business , database transaction , monetary economics , accounting , payment , finance , economics , database , political science , corporate governance , computer science , law
We analyze whether European firms choose to list shares in the US to facilitate acquisitions. Evidence from a sample of 547 European companies shows that cross‐listed firms are significantly more active in acquiring US companies than are their domestically listed peers. This pattern holds even after we account for self‐selection in the cross‐listing decision. Cross‐listed firms are also more likely to use equity payment in large transactions, but after taking self‐selection into account, transaction size becomes the key determinant of the use of equity. After cross‐listing, the proportion of aggregate M&A volume financed with equity increases.