Essay PreviewMore ↓
The key focus of this paper will be on examining the stock price reaction and the patterns of returns before and after listing date for a diverse sample of firms from different countries specifically in the case of London Stock Exchange (LSE). Existing literature has enough evidence that cross-listings on US exchanges are associated with considerable positive stock market reactions (Foerster and Karolyi, 1999; Miller, 1999). However, there has been limited research on the impact of cross-listing on non US exchanges. This serves as a primary motivation for my interest to explore and gain understanding on a stock’s return in its home market as result of cross-listing on LSE.
The rest of this paper is structured in the following manner. Section 2 provides a literature review, while section 3 outlines the data, sample and research methodology. Section 4 presents the empirical results and its discussions. Finally, in section 5 I draw a conclusion.
In this section, I present an overview of the existing literature that has been reviewed as a part of gaining an understanding on the extent of work that has already been done on the topic of cross-listing and its impact on stock returns. Moreover, literature review was also essential for understanding the statistical methodologies and approaches that I can apply in this paper for testing my hypothesis. Cross listing has been a topic of immense interest among researchers for a long time. There has been lot of developments as well as debate in the cross-listing literature on its different aspects such as motivation for companies to cross-list, whether cross-listing creates value, its impact on risk and return, its financial and economic impacts so on and so forth.
How to Cite this Page
"Cross-Listing." 123HelpMe.com. 28 Mar 2020
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- In the article Cross Culture Management: Global Healthcare Workers, Kimberly Scott, highlights the importance of cross-cultural interaction and how it affects the healthcare environment. She continues by listing the challenges as well as the strategies for improving cultural diversity in a work environment. With globalization, cultures are colliding leading to the need of cultures to inspire one another for the organization to be successful. According to the author, it is impossible for an organization to succeed without putting into consideration other cultures values as employment has become more culturally diverse.... [tags: Culture, Sociology, Cross-cultural communication]
730 words (2.1 pages)
- John Stott’s The Cross of Christ will remain a fixture on anyone’s bookshelf who seeks to delve into the depths of Christology. This book is not one that is read once and consumed in completion but promises to continue to challenge and inform the reader upon multiple encounters. With an urgency to awaken the heart of the believer to the centrality of the Cross, Stott shares his own heart and passion while continuing to be precise, logical, and thorough. Its universal impact on one’s conceptions of one’s faith and the actions that flow from that recognition, make it a great tool for ministers and leaders wishing to disciple younger believers into the profundities it has to offer.... [tags: Christology]
1014 words (2.9 pages)
- Tim O’Brien’s “The Things They Carried” is a very character driven story. The author essentially uses the characters to tell the story. Each of the characters are unique in their own way, however they also share certain similarities, which no doubt spring up from the awful situation that they have been put in. All of the soldiers in the short story are very young and have their own unique way of coping with the trauma associated with being at war. The soldiers in "The Things They Carried" use drugs, fantasy and memories as coping mechanisms to escape the everyday horrors of the war while retaining their sanity, but must ultimately give up their fantasies and accept the situation they... [tags: Tim O’Brien, jimmy cross, soldiers]
822 words (2.3 pages)
- The best source of information about crucifixions comes from the four Gospels. But another valuable source of information about the practice of crucifixion is ancient Greek and Roman literature. The Greeks and Romans did not write about crucifixion a lot but, they wrote about it often enough to give important information about this method of execution. The Romans didn’t invent crucifixion as a method of execution, though many believe they perfected it. The Persians were the first to use crucifixion.... [tags: History Records, Cross Types]
1745 words (5 pages)
- What would you do if you had a huge secret to hide. In the book Cross Fire, James Patterson demonstrates a secret that needs to be hidden for some time. Within doing this he also demonstrates a good example of a complete plot. On the other hand the book is mostly written in first person point of view. This has a major effect on the book, in the way it is used. In this complete plot there are five key elements. The first of these five elements is exposition. This is what happens first in the story and is what gives the reader key components.... [tags: Cross fires, James Patterson]
1100 words (3.1 pages)
- A cross culture knowledge transfer: According to Sulzer Infra Company, if there are differences in linguistic and culture background, it is very difficult for an organisation to create an effective international team and to make sure that all the team members are cooperatively communicating with each other (P 183). It was found in the case study that there was no such tradition in the company of cross border exchange of ideas, experience and sharing of information related to company (P 186). For an example as a head of Sulzer Infra management explain that the British employees had a problem of being sharing with Germans and the same found with Germans too.... [tags: Cross-cultural communication, Communication]
749 words (2.1 pages)
- When one looks at cross-cultural communication in the organization one has to look at many deciding factors. Cross-cultural communication is also known as “Intercultural Communication” (Afghari, A., & Pourakbari, A. A. 2015 p. 37). When one looks at any organization one would see where cross-cultural communication plays a part. Cross-cultural communication in an organizations are growing. It is a part of our world whether we like it or not. They have different ethical beliefs. Whether we like it or not what seems to be the norm to use will not be the norm to someone else.... [tags: Culture, Cross-cultural communication, Leadership]
2268 words (6.5 pages)
- Attention Getter: According to The Red Cross Foundation, the American Red Cross responds to more than 70,000 disasters in America each year. Significance: This is significant, because the Red Cross responds to house and apartment fires, spills and transportation accidents, explosions, and other natural and man-made disasters, which all help to serve people in need of physical and emotional help after a traumatic experience. Credibility: I choose to speak about the Red Cross, because they offer relief to people at times when they own almost nothing.... [tags: American Red Cross]
1166 words (3.3 pages)
- The plan will communicate to young professionals that the American Red Cross is well connected, transparent, and trustworthy; creating an organization for young professionals with the common belief that, “in times of crisis, trust the American Red Cross to support our communities.” The plan will compel young professionals give donations and become involved with the American Red Cross. Ultimately, the goal is to raise $50 million for the organization. Additionally, this plan reinvigorate the inner network of American Red Cross employees and volunteers.... [tags: Facebook, MySpace, American Red Cross]
1058 words (3 pages)
- The American Red Cross It is important to know how the Red Cross began. It was in June 1859 when Henry Dunant went to Solferino, north of Italy. He was a spectator of a small but bloody war. French and Italians had a battle against Austrians. There were more or less 40,000 victims. He was completely horrified with the scene. He interrupted his trip to help the hurt and organized volunteers to save lives. When Henry Dunant went back to his home town Switzerland in 1862, he decided to talk and write about his horrible experience.... [tags: Expository Red Cross Essays]
574 words (1.6 pages)
Brown and Warner (1980, 1985) and Mackinlay (1997) discuss different models and methods used in event study to assess the impact of a certain event from stock price reactions or volatility surrounding the event. I have mainly followed and conducted my empirical analysis on the basis of those papers. Majority researches in the existing literature are based US exchanges. As a result, those findings cannot be used as a proxy for cross-listings on non US exchanges. Drawing conclusion about listings based on the findings from US exchanges only will not give us a comprehensive understanding about the dynamics of cross-listing and its impact on stock returns. There are researches in the literature which show different outcomes of cross-listing for different exchanges. Existing literature has ample evidence of both positive and negative abnormal stock returns around the cross-listing announcement and actual listing dates. Yu-Shan, Chung and Chiang (2008) have shown that Asian firms neither demonstrate any listing effect nor their risk profiles report any significant changes as a result of cross listing on US exchanges. However, they reported significant negative abnormal returns. The impact of cross-listing on different foreign exchanges by US companies and its impact on stock return was examined by Howe and Kelm (1987) whereby it was concluded that cumulative average returns become substantially negative before the listing date and remain negative subsequently. A study by Foerster & Karolyi (1999) on American Depository Receipts (ADR) and ordinary listings in the US reveals abnormal return of 1% around the listing week. Peter Roosenboom and Mathijs A. van Dijk (2009) compare the stock price reaction to cross-listing on eight major US and non-US exchanges. They find that abnormal returns around the cross-listing announcement day is the highest for listings at US exchanges (NYSE and NASDAQ), followed by UK and then by European listings while for Tokyo listings it is insignificant. They concluded that home market stock price reaction is also dependent on the cross-listing destination market. Naliniprava and Manish (2010) investigates the impact of cross listing of ADRs on the Indian stock market for the period June 2004 to July 2009 with the listing date as the event date. Their result indicates a significant negative abnormal local market return on the ADR listing day whereby they concluded that ADR listings have no substantial benefit impact to the local shareholders. Jayaraman, Shastri and Tandon (1993) examine the listing of 95 non-US firms on US exchanges. They find positive abnormal returns on the listing date, followed by negative but insignificant post listing returns. Serra (1999) studies the impact of cross-listing in the US and in the UK on stock price. The study finds that for companies from emerging markets listing in the UK has the same valuation effects as listing in the US. However, for companies from mature markets, the stock price impact is limited to NYSE listings.
From the literature review, I have developed understanding regarding the methodologies and models required to develop and test the following hypothesis for abnormal returns:
Null hypothesis, H0: Cross-listing on LSE has no abnormal effects on stock returns, Ait = 0
Alternative hypothesis, H1: Cross-listing on LSE has abnormal effects on stock returns, Ait ≠ 0
Where, Ait refers to abnormal return.