Title: Corporate governance, growth opportunities, and the choices of cross-listings: The case of Chinese ADRs
Authors: Pan, Lee-Hsien
Lin, Chien-Ting
Yang, Pei-Chi
資訊管理與財務金融系 註:原資管所+財金所
Department of Information Management and Finance
Keywords: Chinese ADRs;Firm characteristics;Corporate governance;Cross-listings
Issue Date: 1-Sep-2013
Abstract: We examine the inter-relationships among internal governance, firm attributes, and the listing choices of American Depositary Receipts (ADRs) for Chinese firms. We find that Chinese ADRs exhibit better performance, higher growth opportunities, and stronger internal governance than domestic firms prior to and after ADR listings. Furthermore, we find that the listing choices are influenced by Chinese firms' growth opportunities and internal governance. Those with lower growth opportunities tend to choose a Level 1 listing that restricts capital-raising but does not require U.S. regulatory compliance. In contrast, those with higher growth opportunities prefer a Level 3 listing that permits public offerings but requires full regulatory compliance. As a result, the improvement in the internal governance of Level 3 ADRs is more pronounced than that of Level 1 ADRs in the post-listing period. This suggests that the extent of improvement in governance is related to the firm attributes and the motivations behind cross-listings. (C) 2013 Elsevier B.V. All rights reserved.
URI: http://dx.doi.org/10.1016/j.pacfin.2013.07.002
ISSN: 0927-538X
DOI: 10.1016/j.pacfin.2013.07.002
Volume: 24
Begin Page: 221
End Page: 234
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