The Impact of the Regional Cross-Listing of Stocks on Firm Value in Sub-Saharan Africa

Author/Editor:

Olatundun Janet Adelegan

Publication Date:

May 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the impact of regional cross-listing on stock prices. The sample consists of sub- Saharan African firms that have cross-listed during the period 1992-2008. Using event study methodology, the study finds positive abnormal returns around the date of the regional cross-listing of stocks. The positive announcement period effect, together with the normal post cross-listing performance, shows that regional cross-listing increases firm value. Overall, this provides evidence that firms benefit from listing outside their home market and need to be taken into consideration by SSA country authorities as they seek a regional approach to stock market development. Thus, policy makers of both the countries of primary listing (home country) and secondary listing (host country) need the right policy handles to conceptualize, facilitate and steer regional cross-listing efforts by firms. Through complementary policy-based efforts, policy makers can set the stage for regional cross-listings and harness the numerous related benefits.

Series:

Working Paper No. 09/99

Subject:

English

Publication Date:

May 1, 2009

ISBN/ISSN:

9781451872460/1018-5941

Stock No:

WPIEA2009099

Format:

Paper

Pages:

26

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