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By Aditaya Kaul, Vikas Mehrotra and Blake PhillipsAditya Kaul, Vikas Mehrotra and Blake Phillips


We study changes in U.S. institutional ownership and its effects for 83 new listings of Canadian equities on U.S. exchanges. While institutional holdings increase starting four quarters before cross-listing, there is a pronounced spike in the listing quarter. This is consistent with foreign listing being essential to attract major foreign investors. Sorting stocks on the change in institutional ownership associated with cross-listing, we find that stocks with the largest increase in ownership experience (a) permanent increases in their prices; (b) the largest increase in comovement with the U.S. equity index; and (c) the largest increase in local liquidity. These results suggest that ownership plays a critical part in driving price and liquidity changes around cross-listings and in inducing comovement with local stocks

Year: 2015
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