1、中文 3070 字， 1657 单词 1 外文翻译 原文 The Geography of Equity Listing:Why Do European Companies List Abroad? Material Source: THE JOURNAL OF FINANCE,VOL.LVII,NO.6， DECEMBER 2002 Author: MARCO PAGANO, AILS A A, AND JOSEF ZECHNER Abstract This paper documents the aggregate trends in the foreign listings of com
2、panies and analyzes both their distinctive pre-listing characteristics and their post-listing performance relative to other companies.In the 1986-97 interval,any European companies listed abroad,but did so mainly on US exchanges.At the same time,the number of US companies listed in Europe decreased.
3、The cross-listings of European companies appear to have sharply different motivations and consequences depending on whether they cross-list in the United States or within Europe.In the first case,companies pursue a strategy of rapid expansion fuelled by high leverage before the listing and large equ
4、ity issues after the listing.They rely increasingly on export markets both before and after the listing,and tend to belong to high-tech industries.In the second case,companies do not grow more than the control group,and increase their leverage after the cross-listing.Also,they fail to increase their
5、 foreign sales in the wake of the cross-listing.The only common features of the two groups are their large size,high R&D spending and high foreign sales before listing abroad. Keywords:cross-listings,going public,initial public offerings,geography 1. Introduction Foreign listings are becoming an inc
6、reasingly important strategic issue for companies and stock exchanges alike.As companies become global in their product market and investment strategies,direct access to foreign capital markets via an equity listing can yield important benefits.At the same time,the international 2 integration of cap
7、ital markets has led to unprecedented levels of competition among stock exchanges.In this competitive struggle,the winners are the exchanges that manage to attract more foreign listings and the attendant trading volume and business opportunities.Despite the importance of these issues,still little is
8、 known about which exchanges are successful in capturing more listings from abroad and why.This question is intimately related with a second issue,namely what advantages companies expect to get from a foreign listing:securing cheap equity capital for new investment,allowing controlling shareholders
9、to divest on a liquid market,preparing for a strategy of foreign acquisitions,or simply enhancing the companys reputation with customers,suppliers and employees.In this paper we address both issues.We first outline the main reasons why companies list abroad and draw testable predictions from each hy
10、pothesis(Section 2).Some of these predictions concern the relationship between ex ante characteristics of companies(e.g.,size)and their decision to list abroad.Others concern the relationship between their decision to list abroad and their ex post behavior(e.g.,their growth rate after listing abroad
11、).We then proceed to analyze the overall pattern of cross-listings,studying the geographical origin and destination of firms which went public on the worlds major equity exchanges in 1986-97(Section 3).We examine whether there has been an increase in the number of“footloose companies”,which exchange
12、s they have favored and which countries they originate from.Next,we analyze companiescross-listing decisions and their choice of destination,trying to quantify the relative importance of the motives outlined in Section 2.We use company-level data for non-financial European companies in 1986-97,drawn
13、 from the Global Vantage and Worldscope databases.We perform a first exploration of the data using descriptive statistics centered on the year of cross-listing(Section 4).We then turn to an econometric analysis of the variables which affect the choice to list abroad for the first time,as well as the
14、 choice between listing in the US or in Europe(Section 5). Finally,we try to gauge if listing abroad affects the subsequent performance of companies relative to our control sample,and how this differential performance hinges on cross-listing in the US as opposed to Europe(Section 6).We conclude with
15、 a summary of the main results of the paper(Section 7). 2. Hypotheses and Related Literature In this section we outline the reasons why companies may want to list on an exchange outside their country of incorporation,either as their first port of entry into the public equity market or after having a
16、lready listed on their domestic exchange. 3 First of all,companies may list abroad because funding abroad may be cheaper or more easily available.This can happen for various reasons,detailed below in Section 2.1 jointly with their empirical implications.Second,the publicity that comes with a listing
17、 can enhance a companys reputation with its suppliers and customers,as explained in Section 2.2.On the other side of the ledger,the costs of listing abroad may deter certain companies,as discussed in Section 2.3.Table 1 summarizes the testable implications of the various motives of the decision to l
18、ist abroad,relating it both to(i)the pre-listing company characteristics and to(ii)its likely effect on subsequent performance. 2.1 Selling Securities on Better Terms By listing abroad firms may improve the terms on which they can raise capital or on which their shareholders can sell existing securi
19、ties.This motive is strongest if the firm or its existing shareholders need to raise capital and if financial constraints in the home market are significant.Some of the empirical predictions relevant for this motive have to do with the reason why capital is needed,and others have to do with why cros
20、s-listing makes it cheaper. The salient reason why a company may need funding is to carry out new investment programs.The required funding is likely to be especially large for fast-growing companies,and especially expensive if the company is already highly levered.Therefore,companies which cross-lis
21、t in order to raise capital cheaply should have a higher leverage,investment and growth rate before cross-listing and engage in a primary equity offering at the time of the cross-listing or shortly afterwards.Moreover,such companies would be more likely to cross-list on a deep stock market such as t
22、he US or the UK than on shallow markets such as most exchanges in continental Europe.Since higher expected growth should translate into higher price-earning ratios(P/E),one would also expect them to have higher P/E ratios than comparable domestic companies.Rather than via organic growth,a company ma
23、y choose to expand by a merger or acquisition involving a foreign company.The acquisition of a target company is facilitated by using the bidders shares as a medium of exchange,but the latter are an acceptable“currency”only if the two companies are listed on the same exchange. Even if the firm has n
24、o need to finance new investment,its current shareholders may want to sell out,and listing abroad can increase the market value of their stake. Privatizations are an important special case,where the government is the divesting shareholder.Therefore,we would expect newly privatized companies to be mo
25、re 4 likely to cross-list than other comparable companies.A more direct test would look at whether,in general,the main shareholders sell out at the time of cross-listing or shortly afterwards.An imperfect proxy for such divestment can be an abnormally high turnover.We now turn to the reasons why lis
26、ting abroad can raise a companys stock market value. a) Reducing barriers for foreign investors Widening the clientele for a firms shares improves risk sharing and thus lowers the cost of capital. Listing abroad can mitigate market segmentation by reducing barriers to foreign investors,such as: (i)r
27、egulatory barriers :for instance,pension funds may face a ceiling on the proportion of their assets invested in stocks not listed on their domestic market； (ii)transaction costs: for instance,dividends of non-US shares held by US residents must be converted into dollars at the expense of individual
28、investors； (iii)informational frictions: these range from total ignorance of foreign investment opportunities as in Mertons“awareness hypothesis”,to an informational disadvantage when trading foreign stocks,as in Gehrig(1993),Kang and Stulz(1994)and Brennan and Cao(1997). b) Capitalizing on product
29、market reputation Companies which sell popular brands abroad may find it easier to place their shares in foreign markets because local investors already trust them as consumers. c)Relying on foreign expertise The exchange where a company lists may be determined by the location of analysts with super
30、ior technological knowledge of the industry. d)Committing to disclosure and corporate governance standards The listing location may also be affected by differences in regulatory regimes,especially concerning shareholder protection. e)Liquidity Some markets may be better positioned than others in the
31、 production of liquidity,for instance because of a better design of their microstructure or because of a larger number of competing market makers. f)Relative mispricing Firms may decide to list abroad to take advantage of a temporarily high price for their shares abroad relative to their home market
32、. 2.2.Product Market Spillovers Firmsdecisions about where to list may be affected by the location of their product market,because the cross-listing may generate a positive feedback on the 5 companys demand from consumers and its relationships with suppliers,owing to its perceived reliability,manage
33、rial and product quality.Stoughton,Wong and Zechner(1998)provide a model where a company lists in order to signal to consumers its high product quality,and as a result captures a larger share of the market and increases its profits.In this model,a listing is not associated with the need to raise cap
34、ital or with the intention to sell out by existing shareholders.The product market spillover hypothesis predicts that cross-listed companies increase their fraction of foreign sales.It is also consistent with higher overall sales growth and profits after the cross-listing.Furthermore,it is only potentially relevant for industries in which the firms product market reputation is of particular significance.
