Cross-Listing, Information Environment, and Market Value: Evidence from U.S. Firms that List on Foreign Stock Exchanges.

This paper examines how cross-listing impacts analyst coverage and forecast accuracy for U.S. firms that cross-list on foreign exchanges. By focusing on U.S. firms cross-listing abroad, we are able to discriminate between two competing explanations for the improvements in information intermediation experienced by foreign firms cross-listing in the U.S. (Lang, Lins, and Miller 2003); that is, whether the improvements are driven by generic cross-listing effects or by the strict disclosure and regulatory requirements specific to the U.S. markets. Our cross-sectional analysis indicates that cross-listing is negatively associated with analyst coverage, and our time-series analysis yields only marginal evidence of post-cross-listing improvement in forecast accuracy. Thus the cross-listing benefits documented in prior research for foreign firms cross-listing in the U.S. are not generalizable to all cross-listings and may be attributable to the strong disclosure and regulatory environment prevalent in the United States. [ABSTRACT FROM AUTHOR]