Journal of Banking & Finance Vol. 34 No. 1 2010
Does cross-listing facilitate changes in corporate ownership and control?
Abstract
This paper examines whether controlling shareholders of foreign firms use a US cross-listing to facilitate changes in ownership and control. Prior to listing, about three quarters of the firms in our sample have a controlling shareholder. After listing, about half of the controlling shareholders’ voting rights decrease, with an average decrease of 24% points that differs significantly from that of the controlling shareholders of benchmark firms that do not cross-list. Large decreases in voting rights are associated with controlling shareholder characteristics, domestic market constraints, and better stock market performance and liquidity. In addition, there is control change in 22% of the firms. Controlling shareholders are more likely to sell control, and are more likely to do so to a foreign buyer, than controlling shareholders of benchmark firms. The results suggest that controlling shareholders who want to sell shares or their control stake can use a US cross-listing to decrease the cost of transferring ownership.
- DOI
- 10.1016/j.jbankfin.2009.07.012
- Volume
- 34
- Issue
- 1
- Pages
- 208-223
- Language
- en
- Sources
- crossref openalex bibtex:phds-export.bib