Legal System and Rule of Law Effects on US Cross-Listing to Bond by Emerging-Market Firms

• Main Authors: Vaaler, Paul M., Schrage, Burkhard N.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2007
• Subjects: Corporate Finance; Finance and Financial Management; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/973; https://doi.org/10.5465/AMBPP.2007.26523155
• Institution: Singapore Management University

The article discusses the legal system and rule of law effects on United States businesses that cross-list their securities in overseas financial markets. Firms from emerging market countries with weak corporate governance regimes can internationalize their legal presence though this method, bonding with legal systems and enforcement policies in foreign corporate governance regimes that provide stronger investor protection. This has the result of increasing firm value by decreasing corporate misconduct, broadening the investor base, and lowering capital cost.