Cross-listing and the Value of Corporate Cash Holdings: Evidence from China

Seungjoon Oh; Heungju Park; Xinrui Xie

doi:10.37197/ARFR.2020.33.4.1

Cross-listing and the Value of Corporate Cash Holdings: Evidence from China

Seungjoon Oh, Heungju Park, Xinrui Xie

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	465-490
Number of pages	26
Journal	Asian Review of Financial Research
Volume	33
Issue number	4
DOIs	https://doi.org/10.37197/ARFR.2020.33.4.1
State	Published - Nov 2020
Externally published	Yes

Keywords

Cash holdings
Chinese AH share
Chinese split-share reform
Corporate governance
Cross-listing

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10.37197/ARFR.2020.33.4.1

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title = "Cross-listing and the Value of Corporate Cash Holdings: Evidence from China",

abstract = "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{\textquoteright} transparency and disclosure, and thereby the value of cash holdings relative to non-cross-listed companies.",

keywords = "Cash holdings, Chinese AH share, Chinese split-share reform, Corporate governance, Cross-listing",

author = "Seungjoon Oh and Heungju Park and Xinrui Xie",

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journal = "Asian Review of Financial Research",

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N2 - 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.

AB - 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.

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KW - Chinese split-share reform

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JO - Asian Review of Financial Research

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ER -

Cross-listing and the Value of Corporate Cash Holdings: Evidence from China

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Keywords

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