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Cross-Listing, Firm Valuation, and Corporate Governance

Cross-Listing, Firm Valuation, and Corporate Governance

Copyright: © 2014 |Pages: 47
ISBN13: 9781466650473|ISBN10: 1466650478|EISBN13: 9781466650480
DOI: 10.4018/978-1-4666-5047-3.ch004
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MLA

Lixian Liu. "Cross-Listing, Firm Valuation, and Corporate Governance." International Cross-Listing of Chinese Firms, IGI Global, 2014, pp.108-154. https://doi.org/10.4018/978-1-4666-5047-3.ch004

APA

L. Liu (2014). Cross-Listing, Firm Valuation, and Corporate Governance. IGI Global. https://doi.org/10.4018/978-1-4666-5047-3.ch004

Chicago

Lixian Liu. "Cross-Listing, Firm Valuation, and Corporate Governance." In International Cross-Listing of Chinese Firms. Hershey, PA: IGI Global, 2014. https://doi.org/10.4018/978-1-4666-5047-3.ch004

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Abstract

This chapter examines a unique dataset, which, to the best of my knowledge, has not hitherto been used. It concerns the relationship between corporate governance and firm value in the context of Chinese firms cross-listed on major international exchanges, which include the NASDAQ, the New York Stock Exchange (NYSE), the Hong Kong Main Board, the Hong Kong Growth Enterprise Market (GEM), the Singapore Stock Exchange, and the London Alternative Investment Market (AIM). The study is grounded in the bonding theory, which asserts that stringent corporate governance requirements imposed by overseas regulations enhance firm value. Contrary to this theory, firms listed on stock exchanges in mainland China alone command significantly better value than those that are cross-listed on overseas stock exchanges. This results in the conclusion that the general bonding theory cannot adequately explain how cross-listing affects firm valuation in the Chinese context, and thus a refined theory is required.

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