Cross-Listing :: Business, Stock Exchange

Cross-listing can be defined as the listing of a fellowships sh ars in a stock exchange beyond its basis country boundaries. It can also be termed as a substitute listing for firms those which are already listed in their home country. Typically, when companies grow larger and diversify business, they opt for cross-listing to raise capital from larger and more limpid foreign commercialises. In 2009, nearly 3100 firms cross listed their equity on major overseas stock exchanges globally (World Federation of Exchanges, 2010, list provided in appendix) . It is not only pursued by companies from developed countries but companies from emerging countries are also actively participating. Some major global cross-listing destinations are current York bank line Exchange, NASDAQ, London Stock Exchange, Tokyo Stock Exchange, Shanghai Stock Exchange, and so on. The key focus of this writing will be on examining the stock price reaction and the patterns of returns before and after listing view for a diverse sample of firms from opposite countries specifically in the cause of London Stock Exchange (LSE). Existing books has enough certainty that cross-listings on US exchanges are associated with considerable positive stock market reactions (Foerster and Karolyi, 1999 Miller, 1999). However, there has been limited research on the impact of cross-listing on non US exchanges. This serves as a primary motivation for my interest to explore and run into understanding on a stocks return in its home market as result of cross-listing on LSE. The rest of this paper is structured in the following manner. Section 2 provides a literature reexamine, while section 3 outlines the data, sample and research methodology. Section 4 presents the empirical results and its discussions. Finally, in section 5 I draw a conclusion.In this section, I present an overview of the existing literature that has been reviewed as a part of gaining an understanding on the extent of work that has a lready been through with(p) on the way out of cross-listing and its impact on stock returns. Moreover, literature review was also essential for understanding the statistical methodologies and approaches that I can obtain in this paper for testing my hypothesis. Cross listing has been a topic of immense interest among researchers for a long time. There has been lot of developments as well as debate in the cross-listing literature on its different aspects such as motivation for companies to cross-list, whether cross-listing creates value, its impact on risk and return, its fiscal and economic impacts so on and so forth.