O'Connor, Thomas .G.
Is there a Cross Listing Premium for Non-Exchange Traded
International Research Journal of Finance and Economics (25).
In this paper, I examine the valuation effects of trading in the U.S. as non-exchange
issues i.e. Level 1 and 144 firms for non-U.S. firms. The study is motivated by two facts;
first, while the number of new Level 2/3 issues has fallen 2001, Level 1 issues have
remained an attractive listing option for non-U.S. firms. Second, while on theoretical
grounds, firms from low-disclosure regimes have most to gain from exchange listing; these
firms tend to list in the U.S. as non-exchange issues. Here, I examine whether the
continuing attractiveness of, and the tendency of firms to choose a Level 1/144a listing is
value enhancing. My results suggest that the tendency on the part of firms from lowdisclosure
regimes to choose non-exchange issues is justified. Relative to their highdisclosure
peers, these firms tend to gain most from trading in the U.S. However, for Rule
144a issues, the valuation gains are short-lived.
||The author would like to acknowledge the receipt of financial support from the Maynooth Finance
Research Group (MFRG). The paper has benefited from helpful comments from Thomas Flavin, and
from two anonymous referees. Any remaining errors are entirely my own.
||Cross listing; Level 1; Rule 144a; Tobin’s q;
||Faculty of Social Sciences > Economics, Finance and Accounting
||19 Apr 2011 15:38
|Journal or Publication Title:
||International Research Journal of Finance and Economics
||European Journals, Inc.
||Maynooth Finance Research Group (MFRG)
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