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The listing and delisting of German firms on NYSE and NASDAQ: Were there any benefits?

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  • Bessler, Wolfgang
  • Kaen, Fred R.
  • Kurmann, Philipp
  • Zimmermann, Jan

Abstract

From 1990 through 2005 18 German firms listed their shares in the U.S. in the hopes of increasing their market values and lowering their cost of capital. We examine whether these anticipated benefits materialized and find the companies obtained no valuation benefits from their listings. The absence of valuation benefits may explain why 13 firms have delisted since 2006 once Rule 12h-6 was adopted that enabled firms to delist without having to continue to file reports with the SEC. Other factors were the passage of SOX, changes in German corporate governance laws and the emergence of alternative trading platforms.

Suggested Citation

  • Bessler, Wolfgang & Kaen, Fred R. & Kurmann, Philipp & Zimmermann, Jan, 2012. "The listing and delisting of German firms on NYSE and NASDAQ: Were there any benefits?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(4), pages 1024-1053.
    • Handle: RePEc:eee:intfin:v:22:y:2012:i:4:p:1024-1053
    DOI: 10.1016/j.intfin.2012.01.001
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    Cited by:

    1. Huang, Ying & Jacoby, Gady & Jiang, Christine X., 2016. "The bonding hypothesis and the home market liquidity of Chinese cross-listed stocks," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 43(C), pages 146-157.
    2. Cai, Kelly & Lee, Heiwai & Valero, Magali, 2018. "The roles of the information environment and the stock price performance of foreign firms in their decision to delist from U.S. exchanges," Journal of Multinational Financial Management, Elsevier, vol. 47, pages 1-13.
    3. Wolfgang Bessler & Johannes Beyenbach & Marc Steffen Rapp & Marco Vendrasco, 2023. "Why do firms down-list or exit from securities markets?," Review of Managerial Science, Springer, vol. 17(4), pages 1175-1211, May.
    4. Del Bosco, Barbara & Misani, Nicola, 2016. "The effect of cross-listing on the environmental, social, and governance performance of firms," Journal of World Business, Elsevier, vol. 51(6), pages 977-990.

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    More about this item

    Keywords

    Cross listing; Delisting; Market segmentation; Bonding theories; Cost of capital;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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