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| Author: | Hail, L. Leuz, C. |
| Title: | Cost of capital effects and changes in growth expectations around U.S. cross-listings |
| Journal: | Journal of Financial Economics
2009 : SEP, VOL 93:3, p. 428-454 |
| Index terms: | corporate governance capital costs law finance international |
| Language: | eng |
| Abstract: | The article investigates cross-listings in USA, and explores whether they have a reducing effect on the firms' cost of capital. By estimating the cost of capital effects implied by market prices and forecasts, it is found that companies with cross-listings enjoy a lower cost of capital than firms with no cross-listing. For exchange-traded cross-listings the reduction in the cost of capital is over half of the increase in the company value. This effect, though smaller, also exists in the over-the-counter market and in countries with stronger legal institutions. |
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