International Cross-listing and Visibility
This study tests the hypothesis that non-domestic cross-listing is associated with increased firm visibility. We examine visibility changes on the two exchanges with the largest number of non-domestic listings: the London Stock Exchange (LSE) and the New York Stock Exchange (NYSE). Noting that the costs associated with NYSE listing are greater than those for LSE listing, we also test the hypothesis that non-domestic cross-listing on the NYSE is associated with larger visibility increases than LSE listing. Our proxies for visibility are analyst coverage and media attention. Our tests using analyst coverage generally support our hypothesis that non-domestic cross-listing increases visibility, while tests using media attention provide partial support of the hypothesis. Further empirical tests support the hypothesis that non-domestic cross-listing on the NYSE is associated with a larger visibility increase than on the LSE, which partially compensates firms for the higher costs associated with NYSE listing. All of our results are robust to conditioning on the firm's home country capital market type (developed or emerging); the country's geographical region; analysts' tendencies to initiate coverage on firms with good prospects; and the popularity of a firm's industry or country.
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analyst following Asia associated average Business capital market change in analyst change in visibility compared cost coverage cross-listing firms Developed Wall Street domestic earnings growth Emerging equity offering estimates examine Exchange NYSE excluding experience Financial firm's home country Firms in Sample FT citations full sample geographical region greater home country newspaper hypothesis increase in analyst industry investor recognition larger liquidity listing standards London Stock Exchange LSE difference LSE listing firms LSE samples market microstructure matched sample matching firms mean change mean number measure media visibility months Nasdaq non-domestic cross-listing non-domestic firms listing number of analysts number of citations NYSE and LSE NYSE listing Panel percent level period raise reported securities shares signed rank test significantly similar Specifically Stock Exchange LSE Street Journal Europe t-test t-test for NYSE Table trading variables Wall Street Journal Wilcoxon signed rank WSJ citations York Stock Exchange z-statistic