| Summary: | 碩士 === 中原大學 === 國際商學碩士學位學程 === 101 === Cross-listed companies can lower their cost of equity by attracting large number of foreign investors. Value of their companies rises significantly when domestic market is less developed than market, in which companies are cross-listed. There have been several studies done in finding cross-listing effects of Asian companies being cross-listed in US, but the results are contradictive. This paper investigates the influence of cross-listing effect and payout policy on firm performance in the East-Asian companies. Abnormal return and earnings growth are employed as proxies of firm performance, and this study observes five East-Asian countries, including Japan, Singapore, Honk-Kong, Taiwan, and South Korea. The findings show that payout ratio of the cross-listed companies does not affect the abnormal returns, but it negatively affects their future earnings growth. Interaction between dividend payout ratio and dividend yields can offset negative influence of both variables, taken individually, to the future earnings growth. The companies with higher investment opportunities get positive investors’ reaction when they signal about good future prospects by paying out more cash dividends. American investors are cautious to the stocks from foreign countries. They do not easily trust the corporate forecasts and start buying stocks only when companies positively convey dual signals (i.e. payout increases and good investment opportunities) about their future prospects. However, this phenomenon is observed only when those companies are cross-listed and opposite reaction observed when the companies are not cross-listed. The findings of this research paper can be implicated by corporate managers while setting the payout policies. The different influence of cash dividends of cross-listed and non-cross-listed companies to their stocks’ abnormal returns and future earnings would be useful in planning funds for their future investments. As for academic field, our findings about the influence of cross-listing effect and payout policy on firm performance would fill the gap of the literature.
|
|---|
