Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/147665
Title: THE IMPACT OF INSTITUTIONAL INVESTORS ON CROSS BORDER LISTINGS
Authors: PANG JUNYI
Issue Date: 2012
Citation: PANG JUNYI (2012). THE IMPACT OF INSTITUTIONAL INVESTORS ON CROSS BORDER LISTINGS. ScholarBank@NUS Repository.
Abstract: This study investigates the impact of institutional investors on the stock and operating performance of cross-listed firms. We find evidence that institutional ownership is positively associated with higher abnormal returns as well as a greater improvement in the operating performance post-listing. However, the association only holds in the short and medium run up to three years post-listing. Beyond three years, foreign independent institutional investors play a larger role than foreign grey institutions and domestic institutions in driving the abnormal returns and improvement in operating performance of cross-listed firms. Our results are consistent with previous literature, and highlight the superior monitoring capabilities of foreign institutional investors compared to domestic institutions. In particular, we also demonstrate that having the presence of independent institutions such as mutual fund managers and investment advisers in the shareholder base is beneficial to the firm in the long run, as they are deemed to be more active monitoring agents than grey institutions. Further, we also present evidence to show that the stock outperformance and improvement in operating performance experienced by firms in a cross-listing is only transitory, and may not be sustainable in the long run. We also show that the benefits of having a second and higher cross-listing is significantly reduced from the first listing, and we argue that there is hardly any additional incentives for firms to have more than two cross-listings.
URI: http://scholarbank.nus.edu.sg/handle/10635/147665
Appears in Collections:Bachelor's Theses

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