Even though many stock markets in the world adopted involuntary cross-listing with minimal application procedures, the cross-listing literature has widely ignored this activity. The gap in the literature is critical to U.S. restaurant companies since the number of involuntary cross-listings has significantly increased during the last ten years, despite the corporations' decisions not to cross-list or to change strategies to eliminate cross-listings. Direct communication with those foreign-listed U.S. restaurants reveals that they are unaware of involuntary cross-listing. This research uncovers the phenomenon of U.S. restaurants' involuntary cross-listing with a focus on the Frankfurt Stock Exchange, in which a majority of U.S. restaurant shares have cross-listings. Specifically, the current dissertation provides trajectories of U.S. restaurant companies' cross-listing, discovers determinants of involuntary cross-listing that are specific to U.S. restaurant companies, and investigates the consequences of informational asymmetry in the U.S. and Germany, specifically the dynamics of stock prices in the two stock markets. The current dissertation finds that U.S. restaurant companies have widely chosen not to list their shares on foreign exchanges, while many of their shares are subject to involuntary cross-listing on the Frankfurt Stock Exchange by German financial institutions. This study also finds that German financial institutions consider U.S. restaurant companies' sizes, industry growth opportunities, and overall U.S. economic conditions. In addition, the current research finds that U.S. stock prices of U.S. restaurant companies lead the German stock prices of cross-listed U.S. restaurant firms. Empirical findings of this study have valuable theoretical, managerial, and regulatory implications. Theoretically, the research advances understanding of the economic consequences of involuntary cross-listing, to which the cross-listing literature has paid little attention. Specifically, this dissertation provides sharp insights into German financial institutions and German investors involved in the involuntary cross-listing. The current research also confirms the role of information asymmetry and trading volume on the dynamics of stock prices in multiple stock markets. Practically, this study's contribution to U.S. restaurant industry occurs through acknowledgement and evidence of the involuntary cross-listing phenomenon in which more and more U.S. restaurant companies unknowingly engage. The findings also prompt the Frankfurt Stock Exchange to reconsider their policies regarding involuntary cross-listing, and assist U.S. and German investors to understand better the dynamics of stock prices in both countries. / Business Administration/Strategic Management

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Doctor of Philosophy / Department of Economics / Lance J. Bachmeier / Dong Li / For a unique sample of Israeli stocks that went public in the U.S. and then cross-listed in the home market, Tel Aviv Stock Exchange (TASE), this dissertation consists of three essays examining the dynamics of return spillovers and volume-return interactions across markets and the valuation effect around the event of cross-listing and delisting from the home market. In Chapter II, I investigate the role of trading volume in the information flow and return spillovers between the U.S. and Israeli markets. Findings suggest that the dynamics of volume-return interactions across markets can provide us with valuable information regarding future price movements, which can be a useful tool to predict future returns. I also find the home market to dominate the host market in pricing these stocks, which is consistent with the Home Bias hypothesis. In Chapter III, I analyze the impact of the event of cross-listing on stock returns and risk exposure. The behavior of abnormal returns around the cross-listing date implies that cross-listing in TASE is an effective mechanism in reducing market segmentation between the U.S. and the Israeli capital markets. Risk assessment following the cross-listing suggests a decline firms’ overall risk exposure, indicating a higher degree of integration between the two markets due to cross-listing. In Chapter IV, I evaluate changes in the cost-of-capital for Israeli firms after delisting voluntary from TASE, the home market, while maintaining their listing in the U.S., the host market. The results show a significant positive shift in U.S. and negative shift in Israeli market risk exposure after the delisting. These results indicate that firms delisting form their home market (TASE), face greater risk exposure, higher required returns on their stocks and, hence, higher cost-of-capital after delisting.

Chapter 1 of this study investigates the link between a firm’s capital structure and their industry competitive behavior. Given the competitive behavior in certain markets, Cournot or Bertrand, we investigate if there are any inborn characteristics of these markets’ competitive behavior that would create an incentive for Cournot firms to have a different strategic debt level than Bertrand firms. Related theories argue that any industry’s competitive behavior, whether it is Bertrand or Cournot would typically consist of a certain type of debt and pursue a certain type of competitive strategy, based on its classification. In this study, we investigate the debt level of a sample of firms classified into either Cournot or Bertrand competition, i.e. explore competitive behavior as a characteristic of firms that tend to be associated with different debt ratios and determine if the competitive market type does in fact lead to a varying debt ratio target. We used two different measures to categorize competition type, the CSM and the SI measure. Our findings indicate that there is no significant difference between differentiated debt levels between Bertrand and Cournot firms. Chapter 2 of the study examines various factors that may affect American Depository Receipts’ trading volume distribution between their home and US markets. These include factors not previously considered in the extant literature. One such factor is the trading motive (hedging or speculative) of investors. Other factors examined include price impact, relative volatility, market to book ratio, as well as a cultural dimension factor: individualism. Controlling for time-specific effects, we find that the relative motive measure of cross-listed firms has a positive relationship on the trading volume distribution. In addition, when looking at a small sample of firms with different motive factors, we find that hedging motive in the home country leads to an increased proportion of trading in the host country relative to the home country, while speculative motive leads to a decrease in the volume share of the host country relative to the home country. A positive and significant relationship is also observed between volatility and the log of trading volume share. The relationship is negative for liquidity and visibility in relation to the trading volume distribution of cross-listed firm’s stocks. Culture difference at home relative to host is found to positively impact trading volume distribution of cross-listed stocks.

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Chapter 2 undertakes a new investigation of the potential for options to mitigate short sale constraints, conducing two event studies which examine 1732 option introductions and the differential effect of the 2008 short sale ban on optioned and non-optioned stocks. I find option introduction mitigates 79% of the price adjustment efficiency disparity between short sale constrained and unconstrained stocks in relation to negative news. I also find evidence that negative information was incorporated more freely into optioned stocks during the short sale transaction ban of financial sector stocks. These results collectively suggest that in the presence of binding short sale constraints, options act as an effective substitute to short sales, significantly contributing to the informational efficiency of the market. In Chapter 3 we examine the determinants of success of foreign cross-listings in the U.S. using cumulative returns surrounding the cross-listing event and liquidity on the U.S. exchange as joint metrics of success. We find that the post-listing liquidity and valuation benefits of cross-listings are crucially dependent both on prior home-market success and on U.S. institutional holdings in the cross-listing quarter. Stocks with greater institutional ownership upon cross-listing see more liquid U.S. trading. Additionally, firms with a higher abnormal price run-up in the year prior to cross-listing and firms that see more liquid domestic trading enjoy greater post-listing liquidity in the U.S. Chapter 4 examines the asset allocation decisions of mutual fund investors, focusing on flight to quality considerations. Using the default spread, term spread and short term interest rate as proxies for economic conditions, we find that an expected improvement (deterioration) in Canadian economic conditions causes investors to direct flow away from (towards) fixed income-type funds and towards (out of) equity based funds. For example, a one standard deviation increase in the term spread (1.13%) results in an 84% increase and a 74% decrease in the percentage of flow directed at Canadian equity and money market funds respectively, relative to the previous month. / Finance

隨著金融市場的全球化，自一九〇〇年代起各國進行跨國上市的企業逐年增長，而該現象也引起學者對於可能造成跨國上市之因與其中之利弊進行進一步的思考與研究，從而發展出許多假說與相關實證結果。過去的傳統假說以市場分割假說、流動性假說以及投資人認知假說等對跨國上市進行解釋，且多以各國至美國跨國上市作為實證，由於上述假說經實證仍留有無法解釋的部分，進而發展出綁定假說，但無論是傳統或是新興的理論，都留有空間讓我們透過全新的角度去賦予見解，因此本論文期以透過行為財務學的觀點，以投資人情緒來解讀公司進行跨國上市的決策制定。 不同於以往，我們以美國作為實證，檢視全球投資人情緒對於美國公司至全球進行跨國上市決策是否有所影響，樣本期間取自二〇〇三年至二〇一四年，完整樣本數共4,955家企業進行跨國上市，而透過參考文獻我們在考量了公司、交易所與國家三個層級的控制變數後進行相關實證。 實證結果顯示全球投資人情緒確實影響公司進行跨國上市的決策，當全球投資人情緒越高漲，公司進行跨國上市的可能性則提高，而反之亦然。本論文提供已經過長時間假說與實證的跨國上市領域一個新的思考方向，全球投資人情緒的波動將會是一個影響企業至海外進行權益融資的指標之一。 / With the globalization of financial markets, boundaries between countries are getting vague. Since the 〖20〗^(th) century, the amount of firms having their stocks cross-listed oversea is increasing each year, hypotheses and empirical test have long been formed and conducted to figure out the cause and effect of such phenomenon. As for the conventional wisdom, market segmentation, liquidity and investor recognition hypotheses are constructed but still left puzzle unexplained. Bonding theory then been brought up after. But no matter how the conventional wisdom or new research initiatives are trying to interpret, behavioral finance can always bring up a brand new aspect and a whole new explanation. Our paper use global sentiment as a determinant to demonstrate the cross-listing decision-making of a firm. Firms in the United States are using as our samples to test our hypothesis, which is expressed that the higher the global sentiment is, the more possible that a firm would have its stock cross-listed. Our sample period is from 2003 to 2014 and the amount of firms cross-listed in the sample period is 4,955. Familiar with the previous studies we have our control variables divided into three levels, firm, exchange and country. The empirical result indicates that while the sentiment of the globe is high, firms in the United States have the intention to have their stock cross-listed oversea, and vice versa. Our main contribution of this study is that though research in cross-listing has long been studied, we provide a new viewpoint that we confirm the connection between global sentiment and cross-listing decision of financing.

Using a sample of 434 firms listed on U.S. capital markets, including Over-the-counter, and 356 domestically listed firms from 47 countries during 2010 to 2015, this research confirms corporate governance’s positive effect, as well as growth opportunities’ negative effect on firm’s dividend payout. Then, based on the proved relationship above, this research also finds support that cross-listing and Over-the-counter both strengthen the positive relationship between growth opportunities and dividend payout. Meanwhile, although cross-listed and Over-the-counter firms do have stronger corporate governance, no evidence is observed for their strengthening the negative effect of corporate governance on dividend payout.

The purpose of this paper is to investigate the impact of cross-listing on companies' performance. It is divided into two aspects, one in short-term and the other in long-term. In short-run study, 6 companies cross-listing in NYSE and Chinese market are in the sample. In pre-cross-listing period, the abnormal returns are mostly positive and remain stable; the cumulative abnormal returns are close to 0 and the difference among them is very small; but on the cross-listing day, all the companies' abnormal returns decline, and after that day, the abnormal returns still fluctuate around 0 while most of them are negative, and the difference among each company's cumulative abnormal return become large. In long-run study, by using multiple regression of 99 Chinese companies listed in th U.S. markets form 2007 to 2012, there is a significant positive relationship between total asset turnover and cross-listing at 5% significance level and there is a significantly negative relation between market value and cross-listing at 10%significance level; return on equity and return on asset are both positive with cross-llisting, but not significant.

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