Beyond Borders and Institutional Constraints: U.S. Equity Cross-listing and Refinancing Risk in Emerging Market Firms

Sammanfattning

Examining U.S. cross-listings across 25 emerging markets between 1988 and 2024, this paper provides evidence that firms experience a reduction in refinancing risk following an equity cross-listing on a U.S. exchange. The effect emerges gradually and persists over time. Over-the-counter listings show smaller and short-lived effects concentrated around the listing event, while private placements show no detectable impact. Extending the analysis to institutional heterogeneity, the reduction associated with exchange listings is concentrated in countries with weaker disclosure requirements and debt enforcement, where the institutional gap relative to U.S. standards is largest. Although the underlying mechanisms cannot be fully identified, exchange listings appear to relax financing constraints along a non-price dimension, with benefits substituting for weak home-country institutions.