Title: International cross-listings on CEE-stock exchanges

Authors: Marek Kobialka, Hanna K. Koivulehto

Addresses: Department of Corporate Finance Planning and Control, Institute of Management Science, Vienna University of Technology, Favoritenstr. 9-11, 1040 Vienna, Austria. ' Institute for Finance, Banking and Insurance, Vienna University of Economics and Business, Heiligenstadter Strasse 46-48, 1190 Vienna, Austria

Abstract: Improved integration of stock markets has led to a surge in cross-border listings. While academic research has, in the past, concentrated on foreign listings with the host market being located in the USA or Western Europe, this study looks at foreign companies quoting shares on Central and Eastern European exchanges. More precisely, we concentrate on the effects of cross-listing of a foreign company on a CEE Stock Exchange. Our results indicate that the respective home markets react slightly negatively to such a cross-listing with trading volumes increasing considerably and prices tumbling. By contrast, interest in the newly listed stock is strong on the new markets on the first day of trading only; thereafter turnover drops sharply and recovers slowly. Consequently, this study cannot support the assumption of perfect market integration, but rather highlights the existence of a segmented international stock exchange market.

Keywords: cross-listings; event study; CEE; stock market integration; Central and Eastern Europe; stock exchange.

DOI: 10.1504/IJBAAF.2011.039372

International Journal of Banking, Accounting and Finance, 2011 Vol.3 No.1, pp.73 - 90

Published online: 31 Mar 2011 *

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