Corporate governance and interlisted stocks: the persistence of country-specific traits

Abstract

We analyze corporate governance mechanisms in Canadian and US firms. We show that despite similarities in governance practices in both countries, there are differences in the efficacy of these mechanisms. In particular, the performance of Canadian firms is less sensitive to ownership structure than that of US firms. Differences are also found in the performance implications of incentive pay. Our study suggests that country-specific governance trends persist among Canadian firms cross-listed in the United States. These findings may explain why Canadian firms which are cross-listed in the United States continue to trade at a discount compared to their US counterparts.

Citation

Dow, S. and McGuire, J. (2008), "Corporate governance and interlisted stocks: the persistence of country-specific traits", Choi, J.J. and Dow, S. (Ed.) Institutional Approach to Global Corporate Governance: Business Systems and Beyond (International Finance Review, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 207-238. https://doi.org/10.1016/S1569-3767(08)09010-9