Opting Out of Good Governance

摘要: Cross-listing on a U.S. exchange does not bond foreign firms to follow the corporate governance rules of that exchange. Hand-collected data show 80% cross-listed opt out at least one rule, instead committing observe their home country. Relative comply, have weaker practices in they smaller share independent directors. The decision reflects relative costs and benefits doing so. Cross-listed more when coming from countries with weak rules, but if based such are growing need for external finance, likely comply. Finally, opting affects value cash holdings. For dollar held inside firm is worth $1.52 fully complies just $0.32 it non-compliant.