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International Cross-Listing and Visibility

Published online by Cambridge University Press:  06 April 2009

H. Kent Baker ,
John R. Nofsinger  and
Daniel G. Weaver
H. Kent Baker
Affiliation:
kbaker@american.edu, American University, Kogod School of Business, Department of Finance and Real Estate, 4400 Massachusetts Avenue NW, Washington, DC 20016
John R. Nofsinger
Affiliation:
john.nofsinger@cbe.wsu.edu, Washington State University, College of Business and Economics, Department of Finance, Pullman, WA 99164
Daniel G. Weaver
Affiliation:
daniel_weaver@baruch.cuny.edu, Zicklin School of Business, Baruch College, Department of Economics and Finance, 17 Lexington Avenue, Box #20621, New York, NY 10012.
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Abstract

This study shows that international firms listing their shares on the New York Stock Exchange (NYSE) or the London Stock Exchange (LSE) experience a significant increase in visibility, as proxied by analyst coverage and print media attention (The Wall Street Journal or Financial Times). The increase in analyst following is also associated with a decrease in the cost of equity capital after the listing event in a way consistent with Merton's (1987) investor recognition hypothesis. Our results are stronger for NYSE listing firms than for LSE listing firms. This may partially compensate firms for the higher costs associated with NYSE listing (compared to LSE listing).

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 37 , Issue 3 , September 2002 , pp. 495 - 521
Copyright
Copyright © School of Business Administration, University of Washington 2002

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