Sunday, June 16, 2019

Cross Listing Literature review Example | Topics and Well Written Essays - 1250 words

Cross itemization - Literature review ExampleCross ListingThe researcher will take the help of the research work of previous research scholars in order to shed light on the topic. 1.2 Definition of Cross Listing Karolyi (2012) defined cross-listing or dual-listing as the strategical measure taken by companies to list its equities in exchange of unknown countries and the process may or may not involve secondary or initial majuscule rising. The scholar has alike pointed out that cross-listing involves customization or changing the disclosure measure, transparency, corporate governance compulsion in accordance with nature of the business environment of the foreign country where equities are going to be listed. Jian et al. (2011) also pointed out that cross-listing is basically a strategic choice rather being a mere accounting trick performed by top level management of the firm to internationalize its business without involving each traditional international expansion policy su ch as merger & acquisition, exporting, licensing etc. In such context, Karolyi (2012) and Jian et al. (2011) agreed with the fact that cross-listing requires involvement of multiple capital market participants such as accountants, investment banks, custodian agency which undertakes clearance and settlement activities, strategic advisors etc. Hence it can be assumed that cross-listing is a lengthy and complex process. ... like getting access to a larger market, attracting cash rich investors, greater diversification of ownership base, opening door for liquefiable trading can influence a firm to go for cross listing. However, careful analysis of the research work of OConnor (2009) shows that it is very difficult to pin down one reason which might influence firms to go for cross listing. OConnor (2009) has pointed out that nature disclosure in cross-sectional setting can purge influence cross-listing decision. In such context, the study will shed light on empirical reasons behind cr oss listing with help of previous research work of research scholars. 1.3 Reasons for Cross Listing Cross-listing is one of the hotly debated topics among research scholars and identifying exact reason behind cross listing is a long debated wall plug among research scholars. Charitou et al. (2008) identified the fact that none of the research scholars have ever tried to understand the motivation behind cross- listing from managerial perspective. Charitou et al. (2008) argued that executives go for cross-listing in order to get higher equity based compensation. Hence, it can be assumed that listing equity of a firm in exchange of foreign markets is strategic decision which is taken by executives in order to fulfill the interest of shareholders. Listing equities in foreign exchange attracts foreign investors to invest cash on the shares of the company and as a result of the investment of foreign investors, the firm gets able to provide better return to shareholders and subsequently board executives also get higher equity based compensation. Dodd (2013) pointed out that cross-listing helps firms to overcome the market segmentation, limitation of attracting investors and improvement of stock liquidity but these factors

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