A test of effect of cross-listing on the valuation of Chinese firms

Abstract

The purpose of this study is to test the effect of cross-listing on the valuation of Chinese firms. The research performed event study with the event window of 20 days, 60 days and 120 days to examine the existence of accumulated abnormal return when cross-listing on Shanghai Stock Exchange (SSE). The results of this study proved negative accumulated abnormal return on Hong Kong Stock Exchange (HKEx) when listed on SSE. Furthermore, this study discussed effect of cross-listing on the valuation of firms in different industries. These results of our study could be a potential source for decision making and for managers who are attempting to cross-listing on Chinese stock markets.