Look at me now: the role of cross-listing in attracting U.S. investors

John Ammer, Sara B. Holland, David C. Smith and Francis Warnock
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John Ammer: https://www.federalreserve.gov/econres/john-ammer.htm

No 815, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We use a comprehensive 1997 survey to examine U.S. investors' preferences for foreign equities. We document a variety of firm characteristics that can influence U.S. investment, but the most important determinant is whether the stock is cross-listed on a U.S. exchange. Our selection bias-corrected estimates imply that firms that cross-list can increase their U.S. holdings by 8 to 11 percent of their market capitalization, roughly doubling the amount held without cross-listing. All else equal, we find that firms experience smaller increases in U.S. shareholdings upon cross-listing if they are Canadian, from English-speaking countries, are members of the MSCI World index, or had higher quality accounting standards prior to cross-listing. We argue that these findings suggest that improvements in information production explain U.S. investors' attraction to foreign stocks that cross-list in the United States.

Keywords: Investments; Foreign (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-fin
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