Empirical Research On Cross-listings,Capital Investment And Corporate Governance

Cross-listing is that one security is traded in many markets. By the end of2011, there have been71companies, which list their equity shares on A-shareand H-share market, even most of which listed in Hong Kong, and then againin the mainland stock issued. In recent years, substantial progresses havebeen made in the field of research on companies’ cross-listing. As empiricalfindings for cross-listing companies in China, scholars mostly support the thebonding hypothesis theory, But we found that "A+H" cross-listing companiesare not satisfied with the established conditions of the bonding hypothesis,cross-listing behavior is not an effective constraints of our company.Establishment of the bonding hypothesis lies in whether companies’cross-listing can improve the level of corporate governance. Given thepervasiveness of capital investment and closely correlation between corporategovernance and capital investment, the dissertation examines whetheroverseas securities markets bind cross-listing companies effectively from theperspective of capital investment, and provide evidence on the return ofoverseas listed companies in China A-share market cross-listing does notmeet the bonding hypothesis. The dissertation studies the bondingeffectiveness of Hong Kong securities market on mainland cross-listingcompanies and then the specific bonding mechanism on the basis ofinstitutional background of mainland companies’ cross-listing and the status quo of regulation of Hong Kong securities market. This paper uses boththeoretical analysis and empirical testing.In the theoretical analysis, this paper reviews the domestic and foreignscholars in the cross-listing, corporate governance and capital investmentefficiency research, and using agent theory and asymmetric information theoryexplore the cross-listing affects the efficiency of capital investment.In the empirical test section, the paper examines the impact ofcross-listing behavior on the efficiency of capital investment. Empirical test,cross-listed companies have a more efficient level of investment than theA-share companies. Then, in order to further explore whether cross-listingbehavior brings good or cross-listed companies itself are good. We dividedcross-listed companies into two groups, we found that cross-listing company’sinvestment efficiency has not been effectively improved than beforecross-listing.