Equity cross-listings in the U.S. and the price of debt

Using a large panel from 46 countries over 20 years, we find that non-U.S. firms issue corporate bonds more frequently and at lower offering yields following an equity cross-listing on a U.S. exchange. Firms issue more bonds through public offerings instead of private placements and in foreign marke...

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Veröffentlicht in:Review of accounting studies 2018-06, Vol.23 (2), p.385-421
Hauptverfasser: Ball, Ryan T., Hail, Luzi, Vasvari, Florin P.
Format: Artikel
Sprache:eng
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Zusammenfassung:Using a large panel from 46 countries over 20 years, we find that non-U.S. firms issue corporate bonds more frequently and at lower offering yields following an equity cross-listing on a U.S. exchange. Firms issue more bonds through public offerings instead of private placements and in foreign markets rather than at home, in both cases at significantly lower yields. Moreover, the debt-related benefits are concentrated among firms domiciled in countries with less private benefits of control, efficient debt enforcement, and developed bond markets, suggesting that equity cross-listings cannot completely offset the impact of weak home country institutions. The results support the notion that the monitoring, transparency, and visibility benefits brought about by equity cross-listings on U.S. exchanges are valuable to bond investors.
ISSN:1380-6653
1573-7136
DOI:10.1007/s11142-017-9424-0