Why do Chinese firms voluntarily delist from U.S. stock exchanges?

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dc.contributor.advisor Fan, Hong
dc.creator Xiaojun, Xue
dc.date.accessioned 2020-01-22T15:21:05Z
dc.date.available 2020-01-22T15:21:05Z
dc.date.issued 2019
dc.identifier.uri http://library2.smu.ca/handle/01/29228
dc.description 1 online resource (vii, 38 pages) : colour illustrations
dc.description Includes abstract.
dc.description Includes bibliographical references (pages 37-38).
dc.description.abstract This study investigated the potential reasons Chinese firms voluntarily delist from U.S. stock exchanges. Leuz, Triantis, and Wang (2008) argued that firms trade off between benefits and costs of public listing, and firms that have difficulties raising funds from stock markets are more likely to cease public reporting to avoid the high costs. In studying all Chinese firms voluntarily delisted from the New York Stock Exchange and Nasdaq from 2009 to 2017, the T-test empirical results showed that these delisted Chinese firms had significantly worse performance, measured by return on equity (ROE), and lower debt ratios than other active firms. In addition, the multivariate regression results showed the probability of delisting is significantly and negatively associated with firms’ ROE and debt ratio. The finding regarding ROE is consistent with the theory proposed by Leuz et al.(2008). Firms with worse performance are less likely to be appreciated by investors, and therefore, they may choose to delist to avoid the costs of public reporting. The finding regarding debt ratio is not consistent with Leuz et al.(2008), which could be caused by the uniqueness of the Chinese economic environment. The U.S. stock markets were negatively influenced by the 2008 financial crisis, whereas Chinese markets were not. Chinese markets could potentially provide more funds to firms at lower costs than U.S. markets could. Moreover, Chinese financial markets have developed gradually, encouraging Chinese firms to go back to their local financial markets to avoid the underpricing induced by the equity home bias. Chinese firms with lower debt ratios are believed to be relatively safe investments with opportunities to go public on Chinese stock exchanges, which may encourage voluntary delisting from U.S. markets. Firms’ delisting could cause investors to lose capital significantly; these findings will interest shareholders by providing leading indicators of delisting. en_CA
dc.description.provenance Submitted by Greg Hilliard (greg.hilliard@smu.ca) on 2020-01-22T15:21:05Z No. of bitstreams: 1 Xiaojun_Xue_MRP_2019.pdf: 1001647 bytes, checksum: 35241fd39b3b79b624df1632dd813cbd (MD5) en
dc.description.provenance Made available in DSpace on 2020-01-22T15:21:05Z (GMT). No. of bitstreams: 1 Xiaojun_Xue_MRP_2019.pdf: 1001647 bytes, checksum: 35241fd39b3b79b624df1632dd813cbd (MD5) Previous issue date: 2019-08-16 en
dc.language.iso en en_CA
dc.publisher Halifax, N.S. : Saint Mary's University
dc.title Why do Chinese firms voluntarily delist from U.S. stock exchanges? en_CA
dc.type Text en_CA
thesis.degree.name Master of Finance
thesis.degree.level Masters
thesis.degree.discipline Finance, Information Systems, & Management Science
thesis.degree.grantor Saint Mary's University (Halifax, N.S.)
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