Overseas Listing Location and Cost of Capital: Evidence from Chinese Firms Listed in Hong Kong, Singapore, and the United States

Peixin Li; Frank Weikai Li; Baolian Wang

doi:10.1080/1540496X.2018.1436436

Overseas Listing Location and Cost of Capital: Evidence from Chinese Firms Listed in Hong Kong, Singapore, and the United States

Peixin Li
, Frank Weikai Li
, Baolian Wang

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

2 Citations (Scopus)

Abstract

As at the end of 2012, more than 600 nonstate-owned Chinese firms were listed in overseas stock markets. We find that Chinese firms listed in the US have the lowest cost of capital when compared to those listed in Hong Kong and Singapore, and these results hold when controlling for firm characteristics and the endogeneity of listing locations. Cross-sectional tests indicate that listing in the US is more beneficial to those firms which face higher information asymmetry and agency costs. Overall, our evidence supports the view that the institutional environment has a first-order impact on a firm’s cost of capital. ©, Copyright © Taylor & Francis Group, LLC.

Original language	English
Pages (from-to)	365-390
Number of pages	26
Journal	Emerging Markets Finance and Trade
Volume	55
Issue number	2
DOIs	https://doi.org/10.1080/1540496X.2018.1436436
Publication status	Published - 26 Jan 2019
Externally published	Yes

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

Funding

This work was supported by the National Natural Science Foundation of China (Ref. No. 71302127 and 71772196); the Special Research Fund for the Doctoral Program of Ministry of Education (Ref. No. 20130016120001); the Ministry of Education of Humanities and Social Science Project (Ref. No. 17YJC630062); the Young Elite Teacher Project of Central University of Finance and Economics (Ref. No. QYP1606); the Fundamental Research Funds for the Central Universities; the Program for Innovation Research in Central University of Finance and Economics.

Research Keywords

cost of capital
institutional environment
overseas listing

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10.1080/1540496X.2018.1436436

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abstract = "As at the end of 2012, more than 600 nonstate-owned Chinese firms were listed in overseas stock markets. We find that Chinese firms listed in the US have the lowest cost of capital when compared to those listed in Hong Kong and Singapore, and these results hold when controlling for firm characteristics and the endogeneity of listing locations. Cross-sectional tests indicate that listing in the US is more beneficial to those firms which face higher information asymmetry and agency costs. Overall, our evidence supports the view that the institutional environment has a first-order impact on a firm{\textquoteright}s cost of capital. {\textcopyright}, Copyright {\textcopyright} Taylor \& Francis Group, LLC.",

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AU - Wang, Baolian

N1 - Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

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AB - As at the end of 2012, more than 600 nonstate-owned Chinese firms were listed in overseas stock markets. We find that Chinese firms listed in the US have the lowest cost of capital when compared to those listed in Hong Kong and Singapore, and these results hold when controlling for firm characteristics and the endogeneity of listing locations. Cross-sectional tests indicate that listing in the US is more beneficial to those firms which face higher information asymmetry and agency costs. Overall, our evidence supports the view that the institutional environment has a first-order impact on a firm’s cost of capital. ©, Copyright © Taylor & Francis Group, LLC.

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KW - institutional environment

KW - overseas listing

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DO - 10.1080/1540496X.2018.1436436

M3 - RGC 21 - Publication in refereed journal

SN - 1540-496X

VL - 55

SP - 365

EP - 390

JO - Emerging Markets Finance and Trade

JF - Emerging Markets Finance and Trade

IS - 2

ER -

Overseas Listing Location and Cost of Capital: Evidence from Chinese Firms Listed in Hong Kong, Singapore, and the United States

Abstract

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Research Keywords

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