Business Commons^™

Bonding To The Improved Disclosure Environment In The Us: Firms Listing Choices And Their Capital Market Consequences, Ole-Kristian Hope, Tony Kang, Yoonseok Zang

Research Collection School Of Accountancy

This paper examines whether the current reporting and disclosure requirements for foreign registrants in the United States affect foreign firms' decisions to list on a U.S. exchange. We find that while firms from a weak disclosure environment are more likely to cross-list and either trade over-the-counter or be placed privately among institutional investors, they are less likely to list on an exchange in which firms are required to comply with U.S. GAAP. This is consistent with the idea that the decrease in the potential private control benefits accruing to managers discourages them from listing on an organized exchange. We further …