Open Access

Cross-listing and bonding premium: Evidence from Chinese listed companies

Frontiers of Business Research in ChinaSelected Publications from Chinese Universities20104:8

https://doi.org/10.1007/s11782-010-0008-0

Published: 23 May 2010

Abstract

This paper examines whether cross-listing enables firms to earn a higher valuation. We contrast a sample of 580 Chinese firms cross-listed on the B-share market of China and 159 Chinese firms cross-listed on the Hong Kong H-share market against a control sample of domestic firms listed only on the A-share market of China. It is found that firms cross-listed on B-share and H-share markets both enjoy bonding premiums. Moreover, the bonding premium is larger for H-share firms than for B-share firms. Results show that the amount of bonding premium is positively related to the level of investor protection, which provides supporting evidence to the bonding theory.

Keywords

cross-listing bonding theory bonding premium

Notes

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