"You Can Enter but You Cannot Leave...": U.S. Securities Markets and Foreign Firms

Although a number of prior papers have argued the benefits to foreign firms of cross-listing their shares in the U.S., the number of foreign firms exiting U.S. capital markets has been increasing. This has occurred despite the difficulties foreign firms face in deregistering from the Securities and...

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Bibliographic Details
Published in:The Journal of finance (New York) 2008-10, Vol.63 (5), p.2477-2506
Main Authors: MAROSI, ANDRÁS, MASSOUD, NADIA
Format: Article
Language:English
Subjects:
Business structures
Capital market
Capital markets
Compliance costs
Corporate governance
Financial economics
Financial regulation
Foreign business
Foreign enterprises
Investors
Minority shareholders
Public Company Accounting Reform & Investor Protection Act 2002-US
Securities and Exchange Commission
Securities markets
Shareholders
Stock exchange
Stock prices
Studies
U.S.A
Working papers
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Summary:Although a number of prior papers have argued the benefits to foreign firms of cross-listing their shares in the U.S., the number of foreign firms exiting U.S. capital markets has been increasing. This has occurred despite the difficulties foreign firms face in deregistering from the Securities and Exchange Commission (SEC). This paper examines the reasons underlying this trend. One of our main findings is that the passage of the Sarbanes-Oxley Act has reduced the net benefits of a U.S. listing and registration, particularly for smaller foreign firms with lower trading volume and stronger insider control.
ISSN:0022-1082
1540-6261
DOI:10.1111/j.1540-6261.2008.01402.x