The overall results bring to light the strong influence of
cultural similarities in the choice of the cross-listing place. Indeed,
companies performing foreign cross- listings are particularly inclined to list
in countries culturally similar to their origin country. We may note the
influence of elements such as a common language, a common culture, a common
history, and so on. Such statement has already been evoked by the work of M.
Pagano, A. Rbell and J. Zechner34, and a precise look at the results
of the exhibits #15 and #16 in part 11.2. Presentation of the Results
corroborates such idea.
First of all, a striking figure is the weight of foreign
cross-listings performed between Anglo-Saxons35, which represents
35.6% of all 1,347 foreign cross- listings. Another example is the
attractiveness of Euronext Paris for Belgian companies; Euronext Paris
gathering 53% of all the 17 Belgian foreign cross- listings. On the other side,
French and Luxembourgian companies represent 62%
34 M. Pagano, A. Rdell, and J. Zechner, 1999, "The
Geography of Equity Listing: Why Do European Companies List Abroad?"
35 United States, Canada, United Kingdom, Ireland,
Australia, New Zealand and South Africa
of all foreign cross-listings on Euronext Brussels. Although
many Latin American companies (77 over 116, i.e. 66.4%) chose an American stock
exchange as secondary listing place, many (25%) also chose the Spanish stock
exchange BME.
The notion of common history has also to be taken into
consideration. The most convincing examples are the foreign cross-listings of
companies from emerging countries. For instance, Euronext Paris has managed to
attract companies originating from the former French Colonial Empire (three
Moroccan and one Gabonese companies), while the L.S.E has numerous companies
from the former- British Empire (22 Indian companies, 12 South African, 7
Egyptian, 3 Zimbabwean, 2 Nigerian, 1 Kenyan, 1 Jordanian and 6 from the
UAE).
One of the most relevant examples is the case of the
insurance company Old Mutual with shares listed in London, Johannesburg,
Malawi, Namibia and Zimbabwe. Originally founded in South Africa with
subsidiaries in the whole south part of Africa, the group is henceforth based
in London.
Beyond any geographical reasons, the culture appears to be
important in the choice of the second listing place. It may be explained by the
fact that American investors should have more ease to understand English
companies than French ones in terms of corporate governance, accounting data,
and so on. Moreover, the American and the Canadian markets, as well as the
Australian and the New Zealander ones, are very linked.
In addition to cultural similarities, the exhibits #15 and
#16 illustrate the strong economical relations between countries. In this
perspective, Japanese, Israeli, Chinese and Canadian companies tend to
cross-list in the United States instead of in Europe; European companies tend
to foreign cross-list inside Europe; African companies in Europe; New Zealander
companies in Australia.
11.4. Going Further in the Empirical 1nterpretation
Ideally, it would have been interesting to have historical
data for the number and geographical distribution of foreign cross-listings, in
order to analyze the trends over a long period of time and to notice which
countries have gain in attractiveness and vice versa.
The present data are only a "photograph" at a specific moment of
the foreign cross-listing phenomenon.
