Impact of Cross Listing
FACULTY OF COMMERCE
RESEARCH PROJECT PROPOSAL
RESEARCH TOPIC: IMPACT OF REGIONAL CROSS LISTING OF SHARES ON COST OF EQUITY CAPITAL: A CASE FOR KENYAN COMPANIES LISTED IN REGIONAL STOCK MARKETS.
Submitted by: kiptoo martin
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND INFORMATION.
According to Kent et al (2002); globalization of financial markets has resulted in increase in the number of firms choosing to cross list. Bruno (2004) also argues that the pressure of economic globalization is pushing companies to access foreign capital markets.
Cross listing is defined as listing of a firm’s shares in foreign stock exchanges, Bruno (2004), whileChouinard et al (2004) define cross listing as the listing of a firms stocks in exchanges indifferent jurisdictions and they go on to differentiate between dual listing (which is the listing of a firms shares in different exchanges in the same jurisdiction) and cross listing.
The exchange where the firm has been registered/incorporated is the exchange of primary listing, while the exchange which is hosted by a foreign country to the firm is called the exchange of cross listing or foreign listing. According to Olatundun (2009), cross listing can be of two types 1) Government policy induced regional cross listing; this is through imposition of capital controls on portfolio flows and signing of memorandum of understanding and putting in place the necessary conditions to facilitate cross listing. She identifies cross listing in the exchanges of Kenya, Uganda, Tanzania, Rwanda as well as those of South Africa and Namibia as government policy induced. 2) Market driven cross listings; this is where firms by themselves decide to venture into foreign markets as a firm widestrategy. He identifies cross listings in Nigerian Stock exchange and Ghana Stock exchange as market driven cross listings. Ressee et al (2001) on the other hand identify two types of cross listing which exist in United States of America; that is; non USA
RESEARCH PROJECT PROPOSAL
RESEARCH TOPIC: IMPACT OF REGIONAL CROSS LISTING OF SHARES ON COST OF EQUITY CAPITAL: A CASE FOR KENYAN COMPANIES LISTED IN REGIONAL STOCK MARKETS.
Submitted by: kiptoo martin
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND INFORMATION.
According to Kent et al (2002); globalization of financial markets has resulted in increase in the number of firms choosing to cross list. Bruno (2004) also argues that the pressure of economic globalization is pushing companies to access foreign capital markets.
Cross listing is defined as listing of a firm’s shares in foreign stock exchanges, Bruno (2004), whileChouinard et al (2004) define cross listing as the listing of a firms stocks in exchanges indifferent jurisdictions and they go on to differentiate between dual listing (which is the listing of a firms shares in different exchanges in the same jurisdiction) and cross listing.
The exchange where the firm has been registered/incorporated is the exchange of primary listing, while the exchange which is hosted by a foreign country to the firm is called the exchange of cross listing or foreign listing. According to Olatundun (2009), cross listing can be of two types 1) Government policy induced regional cross listing; this is through imposition of capital controls on portfolio flows and signing of memorandum of understanding and putting in place the necessary conditions to facilitate cross listing. She identifies cross listing in the exchanges of Kenya, Uganda, Tanzania, Rwanda as well as those of South Africa and Namibia as government policy induced. 2) Market driven cross listings; this is where firms by themselves decide to venture into foreign markets as a firm widestrategy. He identifies cross listings in Nigerian Stock exchange and Ghana Stock exchange as market driven cross listings. Ressee et al (2001) on the other hand identify two types of cross listing which exist in United States of America; that is; non USA