Equity cross-listings in the U.S. and the price of debt

Ball, R T and Hail, L and Vasvari, F (2017) Equity cross-listings in the U.S. and the price of debt. Review of Accounting Studies. ISSN 1380-6653 (In Press)

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Abstract

Using a large panel from 46 countries over 20 years, we find that non-U.S. firms issue corporate bonds more frequently and at lower offering yields following an equity cross-listing on a U.S. exchange. Firms issue more bonds through public offerings instead of private placements and in foreign markets rather than at home, in both cases at significantly lower yields. Moreover, the debt-related benefits are concentrated among firms domiciled in countries with less private benefits of control, efficient debt enforcement, and developed bond markets, suggesting that equity cross-listings cannot completely offset the impact of weak home country institutions. The results support the notion that the monitoring, transparency, and visibility benefits brought about by equity cross-listings on U.S. exchanges are valuable to bond investors

Item Type: Article
Subjects: C > Corporate governance
D > Debt financing
D > Disclosure of financial information
Subject Areas: Accounting
Date Deposited: 14 Jul 2017 15:30
Last Modified: 01 Sep 2017 10:52
URI: http://lbsresearch.london.edu/id/eprint/838

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