Publications

Journal Article

Lang, Raedy, and Yetman (hereafter, LRY) document how firms cross-listed (CL) on U.S. exchanges differ systematically from a matched sample of firms not cross-listed (NCL) in the United States in terms of accounting quality.Specifically, the authors find that post-cross-listing CL firms manage earnings less and recognize losses in a more timely fashion than do NCL firms. Earnings of CL firms also exhibit a stronger post-listing association with share price and return than do earnings of NCL firms. In additional analysis, LRY show the observed post-listing differences result partially from pre-listing differences in accounting quality and partially from changes around cross-listing.

LRY further document that CL firms exhibit higher quality than firms trading on the U.S. over-the-counter (OTC) market or firms cross-listed on other non-U.S. exchanges, thereby confirming the unique implications of cross-listing in the United States on accounting quality.

LRY conclude that their evidence shows CL firms exhibit higher accounting quality than do NCL firms, consistent with the notion that cross-listing in the United States presents CL firms with stringent SEC disclosure requirements and signals their commitment to higher quality reporting.