Investor protection, investment efficiency and value: : The case of cross-listed firms

• Autores: Chinmoy Ghosh, Fan He
• Localización: Financial management, ISSN 0046-3892, Vol. 44, Nº 3, 2015, págs. 499-546
• Idioma: inglés
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• Resumen

  • We examine the impact of improved investor protection due to cross-listing on foreign firms' investment decisions and firm value. While we find that cross-listing increases firms' capital expenditures and mergers and acquisitions activities, cross-listed firms also invest more in research and development, make better acquisition decisions, and have higher profitability compared to non-cross-listed firms. Moreover, cross-listing is associated with better cash utilization by foreign firms for investments. These improvements in investments and cash utilization are more pronounced for firms cross-listed on US exchanges and for firms from countries with weak investor protection laws.