Cross Listing - What Do Managers Say?

What Do Managers Say?

A questionnaire asking managers of international companies has shown that firms cross-list in the US mainly because of specific US business reasons (for instance US acquisitions, US business expansion and publicity), liquidity and status of US capital markets, and industry specific reasons (listing of competitors, benefits of financial analysts). Meeting SEC disclosure requirements and preparing US-GAAP reconciliations were cited as the most important disadvantages. Officials of ADR companies without an official listing (Level I and Rule 144A ADR’s) perceived the expansion of the US shareholder base as the principal benefit followed by specific US business reasons. On the question of what deters them from an official US listing, they mentioned the time-consuming and expensive US-GAAP reconciliations as well as listing fees as the hardest impediments. Additional disclosure requirements were cited as less difficult to overcome.