An Empirical Analysis of Cross-Listing Decisions in Share-Issue Privatizations : Evidence from Developed and Developing Countries

Frequently the largest equity offerings in the world, share-issue privatizations (SIPs) are sometimes conducted entirely on domestic exchanges and are sometimes cross-listed on foreign exchanges. In this paper, we examine the determinants of a privatizing government's actions regarding whether and where to cross-list. Using data from 821 SIPs from 76 countries during 1985-2007, we identify firm-level and institution-level factors that affect the cross-listing decisions in these equity offerings. The data indicate that offering size, industry, and product market are the firm-level characteristics most closely related to the cross-listing decisions. We also find that institution-level factors (such as the country's level of economic development and capital market development) significantly impact the likelihood of cross-listings in share-issue privatizations. We further identify that the factors affecting cross-listing decisions vary significantly between developed and developing nations