The Impact Of Cross Listing On Corporate Risk Taking

With the development of global economic integration,more and more mainland companies have chosen to cross-list on developed capital markets such as Hong Kong,New York,Singapore and London.However,due to economic,cultural and geographical,Hong Kong has become the main target market for overseas cross-listing of mainland enterprises.B-shares are China's special stocks.Before 2001,investors were restricted to foreigners.After 2001,they opened up individual domestic residents to invest in B-shares,and the B-share market has gradually become a hot topic of academic research.At present,scholars' research on cross-listing mainly focuses on cross-listing's influence on corporate governance,information disclosure,and capital cost.However,there are few studies on cross-listing of corporate investment decisions,and investment decisions are important strategic decisions for companies.It is crucial for the long-term development of the company.Against this backdrop,this paper focuses on the impact of the cross-listing of A+H shares and A+B shares on the level of risk-taking for corporate investment.This paper selects companies that have completed cross-listing between H-shares and B-shares during2010-2014 as research samples,and uses the propensity score matching method to find companies that are only listed on the A-share market as a pairing sample,and studies the impact of cross-listing on corporate risk taking.In addition,the original characteristics of the company itself may lead to different sensitivity to cross-listing.Therefore,the sample is grouped according to the nature of equity and management agency costs,and the relationship between cross-listing and risk-taking is tested separately.The ultimate goal of business operations is to increase the value of the company.Therefore,the paper further examines the relationship between the level of risk-taking and the value of the company,and whether this relationship will be affected by the cross-listing.The results show that the level of risk-taking of A+H and A+B cross-listed companies is significantly higher than that of matched non-cross-listed companies,that is,cross-listing behavior improves the level of risk-taking.As a whole,there is a difference in ownership in the positive relationship between cross-listing and risk-taking.Cross-listing has increased the risk-taking level of non-state-owned enterprises.The positive relationship between cross-listing and the risk-taking also has differences in agency costs.The positive relationship is more pronounced in companies with higher agency costs;There is a significant positive correlation between corporate risk taking and corporate market value,which shows that risk taking has a value-raising effec.The contribution of this article lies in: First,under the guidance and support of relevant government policies in our country,cross-listed companies are mostly star companies in the industry.Therefore,there may be self-selection problems in the research sample.This paper adopts propensity score matching method(PSM),effectively overcome the endogenous problems caused by sample selection,and reasonable research design improves the persuasiveness of the conclusions of this study.Second,Enriched the literature on the factors affecting corporate risk taking.It was first proposed that the cross-listing behavior can improve the level of risk-taking.Third,distinguishing the influence of cross-listing on the nature of equity research helps to understand more deeply the differences in ownership of enterprises under the background of China's special system.Fourth,under the background of global economic integration,more and more companies will choose cross-listing.The study of the economic consequences of cross-listing will help analyze the advantages and disadvantages of cross-listing and provide a reference for companies preparing to cross-list.