SSRN-Has New York Become Less Competitive in Global Markets? Evaluating Foreign Listing Choices over Time by Craig Doidge, George Karolyi, René Stulz:
From the abstract:
"This decline in cross-listings is explained by changes in firm characteristics rather than by changes in the benefits of cross-listing. We show that, after controlling for firm characteristics, there is no deficit in cross-listing counts on U.S. exchanges related to SOX. Investigating the valuation differential between listed and nonlisted firms (the “cross-listing premium”) from 1990 to 2005, we find that there is a significant premium for U.S. exchange listings every year, that the premium has not fallen significantly in recent years, that it persists when allowing for unobservable firm characteristics, and that there is a permanent premium"A look-in:
"There is a governance benefit from cross-listing on a U.S. exchange because listing reduces controlling shareholders’ ability to extract private benefits from the corporations they control (see, e.g., Doidge, 2004, for empirical evidence).Some controlling shareholders are willing to bear the cost of better governance because it enables them to raise capital on better terms to fund their firm’s growth opportunities. Consequently, controlling shareholders trade off the cost of cross-listing, defined by the improved governance systems which reduce their private benefits, against the benefit of cross-listing, captured by their ability to fund growth opportunities on better terms. Only firms for which the benefit more than offsets the cost will list in the U.S. As a result, U.S. cross-listed firms are worth more because they have better growth opportunities and better governance."Of course this runs counter to previous work and may not be the last word, but it is the most recent word.
Doidge, Craig Andrew, Karolyi, George Andrew and Stulz, René M., "Has New York Become Less Competitive in Global Markets? Evaluating Foreign Listing Choices over Time" (July 2007). Fisher College of Business Working Paper No. 2007-03-012 Available at SSRN: http://ssrn.com/abstract=982193