The Geography of Equity Listing: Why Do Companies List Abroad?


  • Marco Pagano,

  • Ailsa A. Röell,

  • Josef Zechner

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    • Pagano is from CSEF, the University of Salerno, and CEPR; Röell is from Princeton University and CEPR; Zechner is from the University of Vienna and CEPR. We thank Paul Arlman; Asher Blass; Gilles Chemla; Andrew Karolyi; Stewart Myers; Gideon Saar; George Sofianos; Richard Stehle; Yishay Yafeh; and seminar participants at Aachen, Banque de France, CEPR, Copenhagen, Humboldt (Berlin), Konstanz, LSE, MIT, New York Federal Reserve, NYSE, Tel-Aviv, the Barcelona CEPR-IAE Workshop on Banking and Financial Markets, the 2001 INQUIRE Joint Spring Seminar, and the 2001 WFA meetings for helpful comments. Larissa Lube, Michael Halling, and Otto Randl have provided outstanding research assistance. This research has been supported by grants awarded by INQUIRE, the Fondation Banque de France, and the Italian Ministry of University and Scientific and Technological Research (MURST). This paper is produced as part of a CEPR research network on The Industrial Organization of Banking and Financial Markets in Europe, funded by the European Commission under the TMR Programme (contract No ERBFMRXCT980222).


This paper documents aggregate trends in the foreign listings of companies, and analyzes their distinctive prelisting characteristics and postlisting performance. In 1986–1997, many European companies listed abroad, mainly on U.S. exchanges, while the number of U.S. companies listed in Europe decreased. European companies that cross-list tend to be large and recently privatized firms, and expand their foreign sales after listing abroad. They differ sharply depending on where they cross-list: The U.S. exchanges attract high-tech and export-oriented companies that expand rapidly without significant leveraging. Companies cross-listing within Europe do not grow unusually fast, and increase their leverage after cross-listing.