The scope of this thesis is to investigate the impact of the international cross/multi-listing on shareholders wealth and on the eventual change of stock liquidity and volatility. On the one hand, international cross/multi-listing, could positively contribute to stock performance. On the other hand the presence of the company in more than one stock exchange increases shareholders wealth (cfr Chapter 2). In this chapter we highlight the differences in capital gains when a company is listed in different stock exchandes : e.g. American, British and European stock exchanges. Finally, by making reference to underlying theories, we examinate which are the factors that drive the increase in stock performance. Following that, we examinate how the impact of cross-listing on stock performance has changed over time. This is in line with the shifting trends in the financial markets over the last twenty years. In this respect, the introduction of the Euro and the Sarbanes-Oxley Act have played a fundamental role. Our findings consist of a strong positive association between cross-listing activity and shareholders' wealth. However, the link between cross-listing waves and stock performance is not direct, in the sense that it varies according to the prevailing market. The economic or legal system of the prevailing market not only has an effect on the benefits stemming from cross-listing, but it also influences the sources of value creation. From an aggregate point of view, this chapter consists of an in-depth analysis of the reasons behind the decision to cross-list. Beyond this, we compare the differentials in benefits that arise from cross-listing in different markets and within changing market conditions. We proceed by examining the impact of cross-listing activities on stock liquidity and volatility (Chapter 3). Cross-listing activity triggers the mandatory disclosure of information in order to satisfy the host market requirements. It follows that information asymmetry among market participants (i.e. managers, investors and shareholders) is reduced. Since agents are better informed, stock liquidity should increase and stock performance will turn out to be less volatile. Our findings suggest that both stock liquidity and stock performance improve in the wake of cross-listing activity. Additionally, we make a distinction between cross-listing and cross-trading activities. Such a distinction is significant because cross-trading does not require the disclosure of additional information, which is otherwise needed by cross-listing activity. In line with the above statement, we should expect a difference in the level of information between cross-listed and cross-traded stocks. However, the empirical estimates suggest that there is no statistically significant difference between the volatility or the liquidity of cross-traded and cross-listed stocks. This result suggests that the improvement in the liquidity and volatility of both cross-listed and cross-traded stocks arises from the degree of competition among traders, rather than from information disclosure requirements. Finally, our results suggest that cross-listing is beneficial both for companies and shareholders. Besides this overall finding, we find that the impact of cross-listing activity on stock prices varies according to the host market and firm-specific characteristics. To conclude, the content of our findings is not static, in the sense that it is sensitive to changing market regulation and trading conditions.
Questa tesi vuole indagare suggli effetti che scaturiscono dalla quotazione in due o più mercati esteri di una società, sul valore per gli azionisti e sulla liquidità e volatilità dei titoli azionari. L’impatto sul valore degli azionisti determinato dal ruolo giocato dal cross-listing internazionale in relazione al rendimento dei titoli azionari, costituisce la tematica empirica di partenza per la nostra trattazione(Capitolo 2). In questo capitolo vengono messi a confronto gli utili degli azionisti derivanti dal cross-listing in diversi mercati azionari esteri, quali le borse americane, le borse britanniche e le borse europee. Infine vengono valutate le determinanti di tale rendimento applicando varie teorie che indagano sull’effetto di un’operazione di cross-listing sul valore per gli azionisti. Inoltre viene esaminato come l’influenza del cross-listing sul rendimento azionario sia cambiata nel tempo, riflettendo in gran parte i cambiamenti significativi subiti dai mercati finanziari negli ultimi venti anni. In particolare, vengono analizzati gli effetti della introduzione dell'euro in Europa e l'adozione del Sarbanes-Oxley Act negli Stati Uniti. I risultati suggeriscono che, mediamente, un’operazione di cross-listing tende a migliorare il valore per gli azionisti ma i rendimenti risultano strettamente dipendenti dal mercato di destinazione. Inoltre, le modifiche a livello normativo ed economico del mercato in cui si opera, non solo alterano i benefici derivanti dal cross-listing, ma influenzano anche le fonti di creazione del valore. Nel complesso, questo capitolo fornisce un’analisi approfondita delle motivazioni per cui si dovrebbe intraprendere un’operazione di cross-listing e dei relativi benefici derivanti in differenti mercati ospitanti, durante situazioni di cambiamento repentino delle condizioni di mercato. La nostra indagine prosegue indagando sull`impatto di un’operazione di cross-listing sulla liquidità e sulla volatilità dei titoli azionari (capitolo 3). Il cross listing conduce implicitamente alla divulgazione obbligatoria delle informazioni al fine di soddisfare i requisiti del mercato ospitante. Ci si aspetta che tali requisiti riducano l’asimmetria informativa tra i vari partecipanti del mercato (manager, intermediari e investitori). Un ambiente informativo intensificato, a sua volta, dovrebbe aumentare la liquidità dei titoli azionari e portare alla riduzione della volatilità dei rendimenti. Le scoperte del nostro studio suggeriscono che la liquiditá e la volatilità dei titoli azionari migliorano visibilmente dopo è stata effettuata che un’operazione di cross-listing è effettuata. Inoltre, questo studio effettua una distinzione tra attività di cross-listing ed attività di cross-trading. Tale distinzione è importante, in quanto l’attività di cross-trading, diversamente dal cross-listing, non necessita della divulgazione di informazioni aggiuntive. Nonostante tale distinzione indichi che vi è una differenza evidente tra l’ambiente informativo delle azioni cross-listed e l’ambiente informativo delle azioni cross traded, i risultati non rivelano alcuna differenza significativa per ciò che concerne la liquiditá e la volatilità delle azioni cross-listed rispetto a quelle delle azioni cross-traded. Tale prova suggerisce che il miglioramento della liquidità e della volatilità delle azioni cross-listed e cross-traded deriva principalmente dalla strenua competizione tra operatori finanziari piuttosto che da esigenze di disclosure obbligatorie. Infine i risultati di questa tesi suggeriscono che il cross listing comporta un beneficio sia per le società che per gli azionisti, ma sugeriscono anche che ci sono variazioni significative sugli effetti del cross-listing in differenti società e nel quotarsi in differenti mercati di destinazione. Infine queste implicazioni non sono statiche e rispondono ai cambiamenti e alle modifiche normative della quotazione e delle condizioni di trading.
Analisi delle conseguenze di un'operazione di quotazione multipla per shareholders, corporate financial managers e traders
SCIPPACERCOLA, AMEDEO;DI PAOLA, ANGELO
2010/2011
Abstract
The scope of this thesis is to investigate the impact of the international cross/multi-listing on shareholders wealth and on the eventual change of stock liquidity and volatility. On the one hand, international cross/multi-listing, could positively contribute to stock performance. On the other hand the presence of the company in more than one stock exchange increases shareholders wealth (cfr Chapter 2). In this chapter we highlight the differences in capital gains when a company is listed in different stock exchandes : e.g. American, British and European stock exchanges. Finally, by making reference to underlying theories, we examinate which are the factors that drive the increase in stock performance. Following that, we examinate how the impact of cross-listing on stock performance has changed over time. This is in line with the shifting trends in the financial markets over the last twenty years. In this respect, the introduction of the Euro and the Sarbanes-Oxley Act have played a fundamental role. Our findings consist of a strong positive association between cross-listing activity and shareholders' wealth. However, the link between cross-listing waves and stock performance is not direct, in the sense that it varies according to the prevailing market. The economic or legal system of the prevailing market not only has an effect on the benefits stemming from cross-listing, but it also influences the sources of value creation. From an aggregate point of view, this chapter consists of an in-depth analysis of the reasons behind the decision to cross-list. Beyond this, we compare the differentials in benefits that arise from cross-listing in different markets and within changing market conditions. We proceed by examining the impact of cross-listing activities on stock liquidity and volatility (Chapter 3). Cross-listing activity triggers the mandatory disclosure of information in order to satisfy the host market requirements. It follows that information asymmetry among market participants (i.e. managers, investors and shareholders) is reduced. Since agents are better informed, stock liquidity should increase and stock performance will turn out to be less volatile. Our findings suggest that both stock liquidity and stock performance improve in the wake of cross-listing activity. Additionally, we make a distinction between cross-listing and cross-trading activities. Such a distinction is significant because cross-trading does not require the disclosure of additional information, which is otherwise needed by cross-listing activity. In line with the above statement, we should expect a difference in the level of information between cross-listed and cross-traded stocks. However, the empirical estimates suggest that there is no statistically significant difference between the volatility or the liquidity of cross-traded and cross-listed stocks. This result suggests that the improvement in the liquidity and volatility of both cross-listed and cross-traded stocks arises from the degree of competition among traders, rather than from information disclosure requirements. Finally, our results suggest that cross-listing is beneficial both for companies and shareholders. Besides this overall finding, we find that the impact of cross-listing activity on stock prices varies according to the host market and firm-specific characteristics. To conclude, the content of our findings is not static, in the sense that it is sensitive to changing market regulation and trading conditions.File | Dimensione | Formato | |
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https://hdl.handle.net/10589/30182