Journal of Financial Economics Vol. 145 No. 1 2022
Cross-listings, antitakeover defenses, and the insulation hypothesis
Abstract
This paper tests a theory conjecturing that cross-listing can insulate firms from potential hostile takeovers owing to the increased cost concern of bidders. We find a significant and positive relation between the corporate control threat and the likelihood that firms cross-list in a foreign country. Firms facing takeover threats are more likely to choose hosting countries with greater accounting differences from the US GAAP. Subsample evidence suggests that cross-listing is more likely to be used as an antitakeover device if firms have foreign market exposure or when all-cash offers are less likely. Tests based on quasi-natural experiments provide further support.
- DOI
- 10.1016/j.jfineco.2021.08.003
- Volume
- 145
- Issue
- 1
- Pages
- 259-276
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref