Foreign Cultures, Sarbanes-Oxley Act and Cross-Delisting

Abstract

This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues. Other uses, including reproduction and distribution, or selling or licensing copies, or posting to personal, institutional or third party websites are prohibited. In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit:

Why do firms cross‐list their shares on foreign exchanges? A review of cross‐listing theories and empirical evidence

“…Dodd et al (2013) find that firms from developed countries tend to cross‐list in countries that are culturally similar to their home countries. In addition, Daugherty and Georgieva (2011) show that cultural distance between the home and host countries is a significant determinant of a decision to delist from the US markets.…”

On the Role of Cultural Distance in the Decision to Cross‐List

“…This could explain why firms from individualistic countries may have less difficulty in expanding their ingroup (shareholder base), while the reverse may not be the case. Alternatively, it could be attributed to either greater managerial overconfidence in individualistic countries (e.g., Daugherty and Georgieva, ) or the notion that managers from individualistic countries tend to dominate members from collectivistic countries. According to Bochner (), members of collectivistic countries are less likely to undertake actions that generate conflict, making them a lower risk for managers.…”

“…Licht () further argues that the extent of legal bonding attained from cross‐listing is significantly affected by the cultural distance between the home and host countries. In addition, Daugherty and Georgieva () show that cultural similarity between the home and host countries affects the decision to delist from the US markets. We extend the literature by looking at the role cultural distance plays in the cross‐listing decision, including both the impact of the total cultural differences between countries and the role of specific cultural dimensions.…”

“…People from individualistic countries find it quite easy to deal with people from outside their group, while this is more difficult for people from collectivistic countries (see Triandis et al ., ). Alternatively, it could be attributed to greater managerial overconfidence in individualistic countries (e.g., Daugherty and Georgieva, ) or to the notion that managers from individualistic countries dominate members from collectivistic countries, who are thus less likely to generate conflict.…”