Publisher： Cambridge University Press
E-ISSN： 1756-6916|52|3|1143-1181
ISSN： 0022-1090
Source： Journal of Financial and Quantitative Analysis, Vol.52, Iss.3, 2017-06, pp. : 1143-1181
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Abstract
On Mar. 21, 2007, the U.S. Securities and Exchange Commission (SEC) passed Exchange Act Rule 12h-6 to make it easier for cross-listed firms to deregister from the U.S. market and escape its regulatory costs. Using difference-in-difference (DD) tests, we find that, on average, Rule 12h-6’s passage induced an increase in voting premium, a decline in equity raising, and a decline in cross-listing premium. These effects are observed for exchange-listed firms and for firms from countries with weak investor protection. We conclude that although cross-listed firms are still valued at a significant premium over non-cross-listed firms, the rule decreased the value of commitment to the U.S. regulatory system.
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