Cross-listing and the Value of Corporate Cash Holdings : Evidence from China
Seungjoon Oh HSBC Business School, Peking University, China
Heungju Park SKK Business School, Sungkyunkwan University, South Korea
Xinrui Xie HSBC Business School, Peking University, China
This paper examines how cross-listing of Chinese A- and Hong Kong H-shares (AH cross-listed) affects the value of corporate cash holdings. Using a sample of AH cross-listed firms, we find that the value of cash holdings is higher for cross-listed than for non-cross-listed firms. The results remain robust to alternative measures of change in cash and consideration of state-owned enterprises. The AH cross-listing valuation premium for cash holdings decreases after a governance reform in the Chinese stock market. Our results suggest that AH cross-listing enhances firms¡¯ transparency and disclosure, and thereby the value of cash holdings relative to non-cross-listed companies.
Seungjoon Oh
Heungju Park
Xinrui Xie
This paper examines how cross-listing of Chinese A- and Hong Kong H-shares (AH cross-listed) affects the value of corporate cash holdings. Using a sample of AH cross-listed firms, we find that the value of cash holdings is higher for cross-listed than for non-cross-listed firms. The results remain robust to alternative measures of change in cash and consideration of state-owned enterprises. The AH cross-listing valuation premium for cash holdings decreases after a governance reform in the Chinese stock market. Our results suggest that AH cross-listing enhances firms¡¯ transparency and disclosure, and thereby the value of cash holdings relative to non-cross-listed companies.