IDEAS home Printed from https://ideas.repec.org/a/eme/rafpps/v7y2008i3p285-307.html
   My bibliography  Save this article

Do regulations matter? The effects of cross‐listing on analysts' coverage and forecast errors

Author

Listed:
  • Abed AL‐Nasser Abdallah

Abstract

Purpose - The purpose of this paper is to compare foreign listings on regulated and unregulated exchanges, and civil and common‐law companies to test the effects of cross‐listing (CL) on the firm's number of analysts and the accuracy of their forecast. Design/methodology/approach - The study is a comparative one. The empirical test employs both univariate and multivariate analyses and a sample of 584 cross‐listed firms along with the number of analysts and analysts' forecast errors (FE). Findings - After controlling for the firm's size, risk, earnings surprise, and industry, the results show that analysts become more active around CL on the London Stock Exchange (LSE) and PORTAL compared to CL on AMEX, NASDAQ, NYSE and over the counter (OTC). On the contrary, no statistically significant decrease in the magnitude of analysts' FEs was reported, suggesting no increase in the quantity of analysts' information. The results hold for both civil and common‐law countries. Research limitations/implications - The study is limited to the use of cross‐listed firms only. Future research should include non‐cross‐listed firms. As for the implications, the evidence indicates that the choice between CL on regulated or unregulated exchanges in the USA has no impact, either on the decision of an analyst to follow the firm or on the quantity of information available about that firm. In addition, the evidence suggests that analysts are more inclined to follow firms that cross‐list on the LSE than on the US regulated exchanges. Moreover, PORTAL, as an unregulated market, provides surprising evidence on the significant role of the US large institutional investors in attracting the highest number of analysts per firm compared to other regulated exchanges. Originality/value - The paper compares CL on regulated and unregulated exchanges in the USA and UK for both civil and common‐law firms. It contributes to the existing literature on CL and information disclosure and has implications for academics, market regulators, professionals, and multinational firms.

Suggested Citation

  • Abed AL‐Nasser Abdallah, 2008. "Do regulations matter? The effects of cross‐listing on analysts' coverage and forecast errors," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 7(3), pages 285-307, August.
    • Handle: RePEc:eme:rafpps:v:7:y:2008:i:3:p:285-307
    DOI: 10.1108/14757700810898267
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/14757700810898267/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/14757700810898267/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/14757700810898267?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kim, Oksana, 2017. "The joint role of the bonding mechanisms and the reduction in market segmentation in valuation of firms cross-listed as Global Depositary Receipts (GDRs)," Journal of Multinational Financial Management, Elsevier, vol. 39(C), pages 19-38.
    2. Ghadhab, Imen & M’rad, Mouna, 2018. "Does US cross-listing come with incremental benefit for already UK cross-listed firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 69(C), pages 188-204.
    3. Abdallah, Abed AL-Nasser & Abdallah, Wissam, 2019. "Does cross-listing in the US improve investment efficiency? Evidence from UK firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 72(C), pages 215-231.
    4. Abed Al-Nasser Abdallah & Wissam Abdallah & Feras M. Salama, 2018. "The Market Reaction to the Adoption of IFRS in the European Insurance Industry," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 43(4), pages 653-703, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:rafpps:v:7:y:2008:i:3:p:285-307. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.