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Article
Publication date: 2 October 2019

Shiheng Wang and Serena Wu

The purpose of this paper is to examine two channels through which accounting standard differences could affect cross-listing: compliance costs and/or comparability benefits.

Abstract

Purpose

The purpose of this paper is to examine two channels through which accounting standard differences could affect cross-listing: compliance costs and/or comparability benefits.

Design/methodology/approach

The authors use two settings to disentangle the two channels. First, financial reporting requirements are more stringent for cross-listings via direct listings than cross-listings via depositary receipts; as a result, the effect of compliance costs (if any) would be manifested differently in the two venues of cross-listings. Second, some host countries allow foreign firms to report under International Financial Reporting Standards (IFRS) without mandating IFRS for domestic firms; compared to host countries that mandate IFRS for both domestic and foreign firms, these IFRS-permitting countries provide a setting to test the importance of comparability benefits while holding constant compliance costs.

Findings

The authors find that prior to IFRS adoption, direct listings decrease with accounting standards differences between two countries while depositary receipts increase with such differences, consistent with the costs of complying with host country’s accounting standards affecting firms’ cross-listing decisions. After the harmonization of accounting standards, the authors find that IFRS-mandating host countries gain cross-listings from other IFRS-mandating jurisdictions, while IFRS-permitting countries do not experience such gains. These combined results suggest that accounting related compliance costs and comparability benefits both influence cross-listing decisions.

Originality/value

The paper employs unique settings that enable an in-depth examination of the role of compliance costs vs that of comparability benefits on cross-listing decisions. The settings employed by the authors allow them to disentangle the two channels and provide an important insight that accounting standard-related compliance costs and comparability benefits both affect cross-listing decisions.

Details

Asian Review of Accounting, vol. 27 no. 4
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 23 September 2019

Helene R. Banks, Bradley J. Bondi, Charles A. Gilman, Elai Katz, Geoffrey E. Liebmann, Ross Sturman and Nicholas S. Millington

To explain the rule changes in Nasdaq’s new Listing Rule IM-5315-1, approved by the US Securities and Exchange Commission (SEC) on February 15, 2019, that permit direct

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Abstract

Purpose

To explain the rule changes in Nasdaq’s new Listing Rule IM-5315-1, approved by the US Securities and Exchange Commission (SEC) on February 15, 2019, that permit direct listings on Nasdaq without an initial public offering, similar to the New York Stock Exchange (NYSE) rule changes approved in 2018.

Design/methodology/approach

Explains the legislative and regulatory background, historic limitations on direct Nasdaq listings, and de-tailed provisions of Nasdaq’s new Listing Rule IM-5315-1.

Findings

The direct listing alternative to an IPO may appeal to cash-rich companies that do not need the publicity or new capital associated with a traditional IPO.

Originality/value

Expert analysis from experienced securities litigation and corporate governance lawyers.

Details

Journal of Investment Compliance, vol. 20 no. 3
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 7 December 2015

Min-Yu (Stella) Liao and Stephen Ferris

When a foreign firm cross-lists on an exchange in the US, it signals stronger investor protection. This is because cross-listing firms must comply with SEC and exchange…

Abstract

Purpose

When a foreign firm cross-lists on an exchange in the US, it signals stronger investor protection. This is because cross-listing firms must comply with SEC and exchange regulations, thus producing stronger corporate governance. Consequently, cross-listing increases firm attractiveness to investors and places domestic rivals at a disadvantage. Rivals might respond by mimicking the governance changes resulting from cross-listing. The purpose of this paper is to examine whether firms respond to their rivals’ cross-listings through improvement in governance.

Design/methodology/approach

This study uses earnings management as a measure of governance for a set of international firms. The authors track the changes in governance of non-cross-listing firms following their rivals’ cross-listings. The authors employ an event study methodology to assess the spillover effect of a competitor’s cross-listing.

Findings

The authors find that rivals exhibit imitative improvements in their governance following a competitor’s cross-listing. This response is immediate and is the strongest in the year of cross-listing. Further, rivals with greater growth opportunities, lower market share, stronger past performance, and larger size demonstrate greater improvements in governance. Rivals make greater improvements in response to more rigorous Level III listings.

Practical implications

This study finds that cross-listing effects are underestimated. It is not only the investors of the listing-firms who benefit from the cross-listing, but also the investors of non-listing rival as competitors try to match the higher governance standard.

Originality/value

This study is the first that examines the intra-industry spillover effect of a cross-listing. This study also expands the analysis of the spillover effect in a new dimension: corporate governance.

Details

Managerial Finance, vol. 41 no. 12
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 17 June 2006

Nancy Ursel, Xiaohua Lin and Jessica Li

Chinese companies have recently started listing ADRs in North American stock exchanges and thus offered an alternative venue for Western investors whose access to the…

Abstract

Chinese companies have recently started listing ADRs in North American stock exchanges and thus offered an alternative venue for Western investors whose access to the Chinese market has largely been limited to the illiquid B shares. Are ADRs a good substitute for investing in Chinese B Shares? We examine characteristics of return distributions for indices of Chinese shares and an index of Chinese ADRs. We also compare efficient frontiers for portfolios including Chinese shares and Chinese ADRs and compute possible portfolio allocations. We find that investing in Chinese ADRs does not provide a risk/return tradeoff similar to direct investment in Chinese stock exchanges.

Details

Multinational Business Review, vol. 14 no. 2
Type: Research Article
ISSN: 1525-383X

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Book part
Publication date: 14 November 2014

Min-Yu (Stella) Liao and Chris Tamm

We examine what changes, if any, firms are making to their capital structure around the time they cross-list because both of these affect a firm’s corporate governance…

Abstract

Purpose

We examine what changes, if any, firms are making to their capital structure around the time they cross-list because both of these affect a firm’s corporate governance. Cross-listing requires firms to follow SEC rules and regulations, which helps improve the firm governance. A firm’s capital structure, specifically the use of debt, is an effective way to mitigate the conflict between managers and shareholders by reducing the cash available to managers. We examine whether these governance mechanisms are complimentary or being used as substitutes by cross-listing firms.

Methodology

We compare the capital structures of Level II and Level III cross-listing firms from both civil law and common law countries in the three years before and the three years after cross-listing.

Findings

We show firms are significantly reducing their debt to equity ratio after the cross-listing. This reduction is shown for both Level II and Level III firms; however, it is primarily seen in civil law countries.

Practical implications

The corporate governance improvement firms recognize by cross-listing is partially offset by the reduced use of debt after the cross-listing. These governance characteristics may be especially relevant for shareholders in Level III cross-listings because those firms are actually raising addition cash.

Details

Corporate Governance in the US and Global Settings
Type: Book
ISBN: 978-1-78441-292-0

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Article
Publication date: 1 January 1979

Julia E. Miller

“Reference Serials” began in Reference Services Review, April‐June 1974 and last appeared in RSR, October‐December 1974. It was transferred to Serials Review with the…

Abstract

“Reference Serials” began in Reference Services Review, April‐June 1974 and last appeared in RSR, October‐December 1974. It was transferred to Serials Review with the inaugural double issue of SR, January‐June 1975, and appeared there through SR, October‐December 1978. With this issue it returns to RSR because the editors determined, after much examination, that this is where it belongs.

Details

Reference Services Review, vol. 7 no. 1
Type: Research Article
ISSN: 0090-7324

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Article
Publication date: 1 September 2002

Stephen J. Grove, Les Carlson and Michael J. Dorsch

In this study, we examined the degree to which integrated marketing communication (IMC) might be manifested in services advertising. Using one of Lovelock’s typologies of…

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11630

Abstract

In this study, we examined the degree to which integrated marketing communication (IMC) might be manifested in services advertising. Using one of Lovelock’s typologies of services as a framework for classifying different services with respect to their tangibility, we examined ads in each of four service product categories to assess advertisers’ efforts to address the tangibility of service offerings via IMC. We found few differences with regard to incorporation of IMC across four service types, with the exception that services advertisements that reflected tangible acts (lawn care, hairstyling) were more highly integrated than services ads for intangible acts (education, retailing, banking). Results are discussed in terms of the implications for developing better services advertising.

Details

Journal of Services Marketing, vol. 16 no. 5
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 2 August 2013

Martin Haran, Peadar Davis, Michael McCord, Terry Grissom and Graeme Newell

The purpose of the paper is to examine the role of securitised real estate within the confines of a multi‐asset investment portfolio and to identify if indeed securitised…

Abstract

Purpose

The purpose of the paper is to examine the role of securitised real estate within the confines of a multi‐asset investment portfolio and to identify if indeed securitised real estate can afford investors the desired investment benefits of direct property investment whilst mitigating many of the recognised barriers and risks.

Design/methodology/approach

The paper employs a suite of analytical techniques; lead‐lag correlations are utilised to examine market dynamics between listed and direct real estate markets across jurisdictions. Grainger causality and co‐integration techniques are applied to examine the nature and extent of relationships between investment markets with optimal portfolio analysis utilised to explore the role of securitised real estate and the optimum weighting allocation within the confines of a multi‐asset investment portfolio.

Findings

The findings demonstrated the unresponsive nature of direct real estate markets relative to listed real estate markets – in some jurisdictions the extent of lag can be as much as 12 months. Whilst the research did not identify a Grainger causality relationship between listed and direct property markets across the jurisdictions, co‐integration analysis does infer trend reverting price behaviour in the long run (ten years) between direct and listed real estate markets. Optimal portfolio analysis serves to demonstrate the crucial role of real estate within a multi‐asset portfolio in terms of both mitigating risk and enhancing performance over the ten‐year time series. Indeed, the optimal portfolio analysis highlights the compatibility and complementarity of listed and direct real estate within a multi‐asset investment portfolio.

Originality/value

The question if securitised real estate is a viable proxy for direct property investment is as inconclusive as it is enduring. In contrast to the large embodiment of previous work, this paper adopts an international market perspective depicting the global nature of securitised real estate investment markets whilst also reflecting on the extent of co‐integration between asset classes and across jurisdictions during a period of extreme financial and economic distress.

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Book part
Publication date: 1 March 2021

Matthew W. Ragas and Ron Culp

Abstract

Details

Business Acumen for Strategic Communicators: A Primer
Type: Book
ISBN: 978-1-83867-662-9

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Article
Publication date: 1 August 2016

Graeme Newell and Muhammad Jufri Bin Marzuki

UK-Real Estate Investment Trusts (REITs) are an important property investment vehicle, being the fourth largest REIT market globally. The purpose of this paper is to…

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1181

Abstract

Purpose

UK-Real Estate Investment Trusts (REITs) are an important property investment vehicle, being the fourth largest REIT market globally. The purpose of this paper is to assess the significance, risk-adjusted performance and portfolio diversification benefits of UK-REITs in a mixed-asset portfolio over 2007−2014. The post-global financial crisis (GFC) recovery of UK-REITs is highlighted.

Design/methodology/approach

Using total monthly returns, the risk-adjusted performance and portfolio diversification benefits of UK-REITs over 2007–2014 are assessed. Efficient frontier and asset allocation diagrams are used to assess the role of UK-REITs in a mixed-asset portfolio. Sub-period analysis is used to assess the post-GFC recovery of UK-REITs.

Findings

UK-REITs delivered poor risk-adjusted returns compared to UK stocks over 2007–2014 with limited portfolio diversification benefits. However, since the GFC, UK-REITs have delivered strong risk-adjusted returns, but with continued limited portfolio diversification benefits with UK stocks. Importantly, this sees UK-REITs as strongly contributing to the UK mixed-asset portfolio across the portfolio risk spectrum in the post-GFC environment.

Practical implications

UK-REITs are a significant market at a European and global REIT level. The results highlight the major role of UK-REITs in a UK mixed-asset portfolio in the post-GFC context. The strong risk-adjusted performance of UK-REITs compared to UK stocks sees UK-REITs contributing to the mixed-asset portfolio across the portfolio risk spectrum. This is particularly important, as many investors (e.g. small pension funds, defined contribution [DC] funds) use UK-REITs to obtain their property exposure in a liquid format, as well as the increased importance of blended property portfolios of listed property and direct property.

Originality/value

This paper is the first published empirical research analysis of the risk-adjusted performance of UK-REITs and the role of UK-REITs in a mixed-asset portfolio. This research enables empirically validated, more informed and practical property investment decision-making regarding the strategic role of UK-REITs in a portfolio.

Details

Journal of European Real Estate Research, vol. 9 no. 2
Type: Research Article
ISSN: 1753-9269

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