Verified Document

Cross Border IPO Research Paper

Related Topics:

IPOs Stock exchanges today are virtual entities that compete globally for new business. Multinationals have in recent decades taken an interest in cross-listing on multiple exchanges, as to do so improves the ability to raise capital and to allow more investors access to their companies. A company like mining giant Rio Tinto, for example, is listed in its native Australia, but is also cross-listed in London and on the NYSE. There are other benefits as well, such as greater liquidity, or in some cases seeking a more knowledgeable investor base (PWC, 2014). It has been shown that the determinants of long-term performance are different for cross-listed firms with IPO and those that cross-listed after their IPO, illustrating the value of starting with a cross-listing from the outset (Bancel, Kalimipalli & Mittoo, 2009).

Cross-listing should in theory provide a lower cost of capital, especially when cross-listing from a smaller country to a larger one, lower agency costs, and better growth opportunities (Pett, 2013). The results should be that cross-listed firms will enjoy better long-run performance. That in part explains why there has been an uptick in cross-listing, including cross-listing at the IPO.

The unique aspect of the cross-listing IPO is the...

Parts of this document are hidden

View Full Document
svg-one

The timing, as it turns out, matters. When a small market company cross-lists in a larger market, there are prestige effects. The cross-listing effectively signals to investors about the firm's value going forward, in the enhanced firm visibility, improved corporate governance and lower costs. But when a large-market firm cross-lists in a less prestigious market, this sends the opposite signal to the market. It would be expected that the improved liquidity and other factors would be enhanced with any cross-listing, but the prestige factor can explain why this is not the case, and small to large cross-listings outperform large to small cross-listings significantly (Cetorelli & Peristiani, 2010). It may well be that there is home bias, however, as domestic investors tend to faster rates of price discovery than the foreign market investors -- so the benefit might be more about investor ignorance in the larger market than prestige (Yaseen, Lam & Barkoulas, 2014).
While a cross-listed IPO is not the norm, it has become used more frequently. Cross-border IPO activity peaked during 2006-2007 when the IPO markets in general were robust, and then dipped in line with the Great Recession to almost none in 2009. The highest number recorded was 25 such cross-listed…

Sources used in this document:
References

Bancel, F., Kalimipalli, M. & Mittoo, U. (2009). Cross-listing and the long-term performance of ADRs: Revisiting European evidence. Journal of International Financial Markets, Institutions and Money.

Cetorelli, N. & Peristiani, S. (2010). Firm value and cross-listings: The impact of stock market prestige. Federal Reserve Bank of New York. Retrieved November 23, 2014 from http://www.newyorkfed.org/research/staff_reports/sr474.pdf

Pett, D. (2013). Cross-listings don't always pay off for investors in the end. Financial Post. Retrieved November 23, 2014 from http://business.financialpost.com/2013/06/26/cross-listings-dont-always-pay-off-for-investors-in-the-end/

PWC. (2014). Cross-border IPOs: Choice in an uncertain world. PriceWaterhouseCoopers. Retrieved November 23, 2014 from http://www.pwc.com/gx/en/audit-services/publications/ipo-cross-border-survey.jhtml
Cite this Document:
Copy Bibliography Citation

Related Documents

Mathematics of Digital Photography
Words: 925 Length: 3 Document Type: Research Paper

Mathematics in Digital Photography The advances in both digital photography and computing have allowed more detailed and complex images to be shown on more realistic media than was ever previously possible. Through the use of more specialized equipment and digital imaging techniques the resulting photos of even the most novice user today can rival those of professionals from years before. This level of photographic precision could never have been achieved were

Mathematics As Creative Art P.K.
Words: 340 Length: 1 Document Type: Term Paper

if, as Halmos suggests, math is a creative art then math must also be the handmaid of science. Describing mathematics as a creative art helps students of math better understand the true roles of the mathematician. Numbers, while in many ways central to the art of math, do not comprise the whole lexicon of mathology. Mathematics does stem from "sheer pure intellectual curiosity," enabling students to perceive the world through

Mathematics Education the Objective of
Words: 677 Length: 2 Document Type: Term Paper

Balacheff (1987) described four levels of justification, which are those as follows: (1) Native empiricism; 2) Crucial experiment; 3) Generic example; and 4) Thought experiment. (Taflin, nd) Naive empiricism is stated to be "an assertion based on a small number of cases." (Taflin, nd) Crucial experiment is stated to be "an assertion based on a particular case, but the case was used as an example of a class of objects." (Taflin, nd) the

Mathematics From Conch Shells to
Words: 659 Length: 2 Document Type: Term Paper

Islamic art not only demonstrates the symbolic significance of geometric forms and their psychological, social, religious, and aesthetic functions. In addition to these purposes, Islamic art also demonstrates symmetry. Symmetry's appeal is well-known: babies tend to favor faces with symmetrical features over those with lop-sided noses or askew eyes. Although absolute symmetry is by no means a prerequisite for beauty, symmetry is usually perceived with pleasure. The Spirograph forms, explicated

Mathematics Assessment
Words: 1864 Length: 5 Document Type: Essay

Mathematics is closely connected to economics, commerce and business modelling, as well as systems for military weapons. Due to the widespread of its use, it was noted that students in the U.S. were beginning to perform a little worse in mathematics than children from other countries worldwide. Mathematical knowledge among citizens was considered a very important factor for a country to be a leading world power. Assessment activities have been

Mathematics Concepts in Profession Mathematics Concepts in
Words: 767 Length: 2 Document Type: Essay

Mathematics Concepts in Profession Mathematics Concepts in the Teaching Profession Mathematical concepts in professions My Profession and Applicable Math Concepts Mathematics is a branch of knowledge dealing with scientific notions of logical qualitative and quantitative arrangements. It extensively covers different aspects as well as having several subdivisions. It is a tool specially designed to handle and implement relative concepts, regardless of the kind of situational problem presented. Alongside the concepts, mathematics uses invented formulas

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now