Publications and Research
Periodicals
Bank of Canada Review
Winter 2003-2004
Index of Working Papers | Index of Technical Reports| Title | The Rationale for Cross-Border Listings |
| Author(s) | Éric Chouinard and Chris D'Souza |
| Type | Bank of Canada Review article |
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Date of publication |
Winter 2003-2004 |
| Language | English |
| Abstract | Technological progress and the liberalization of capital flows have both contributed to the considerable changes in global equity markets over the past few decades. Yet obstacles to international capital flows still exist, leading to segmentation of markets and creating incentives for corporate managers to adopt financial policies such as international cross-listing. In exploring the costs and benefits of cross-listing, Chouinard and D'Souza find that U.S. exchanges are attracting an increasing share of cross-listed firms. The empirical studies they review suggest that the cost of equity capital declines following a foreign listing as a result of lower transactions costs or an improvement in the quality and quantity of firm-specific information available to investors. As well, informational asymmetries across countries prevent simultaneous price discovery across exchanges. |
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Bank topic index |
International Topics, Financial Markets |
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JEL classification |
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