Research on the Root Cause of Cross-Listing

Fan, Yun-Xin (2020) Research on the Root Cause of Cross-Listing. [Dissertation (University of Nottingham only)]

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The existing hypotheses of cross-listing motivations could only explain part of cross-listing behaviours in a specific period or a specific economy. This paper attempts to find the deep logic of cross-listing motivations, which could explain all cross-listing behaviours.

This paper plans to take the Market Segmentation Hypothesis, Bonding Hypothesis, Avoiding Hypothesis, Investor Recognition Hypothesis, Liquidity Hypothesis and Business Strategy Hypothesis as the theoretical background. From the new perspective of Economic Man Hypothesis, based on the post-positivism paradigm, this paper falsifies the existing cross-listing motivation theories by systematically collecting cross-listing behaviours with the help of grounded theory methodology. This paper concludes that ‘The actual controller net income is the root cause of cross-listing’. This paper also proposes that ‘The Actual Controller Net Income = The Cost of Capital Reduction + Private Benefits of Control + Strategic Goal Achievement’.

Since the private benefits of control and the strategic goal achievement could not be quantified, this paper will center on the cost of capital in terms of quantitative research. The two-factor ICAPM and a multiple regression model will be established for correlation analysis and statistical tests to analyse key factors driving the cost of capital effect of Chinese cross-listed companies and quantitatively studies the specific impact of liquidity, investor recognition, and investor protection on the cost of capital. The research results support the Liquidity Hypothesis, Investor Recognition Hypothesis and Bonding Hypothesis without considering the survivorship bias of samples. This paper realized three points of innovation.

Item Type: Dissertation (University of Nottingham only)
Depositing User: FAN, YUNXIN
Date Deposited: 14 Apr 2023 11:39
Last Modified: 14 Apr 2023 11:39

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