| dc.description.abstract | This paper investigated the Kenyan stock market response to listing abroad. Using a traditional event study methodology of returns, the paper tested two hypotheses, first, the cross listing announcement effect and second, the post-listing performance of cross-listed firms vis-à-vis control non-cross-listed firms.
To determine the reaction to cross-border-listing announcement, the author examined the average abnormal returns surrounding the announcements of the five cross listings achieved, to determine whether they were statistically different from zero using the t-test statistic.
To examine the post-listing performance of the cross-listed firms vis-à-vis the control firms, selected on the basis of market/price-to-book values, both sets of firms’ post-listing average abnormal returns were obtained and tested for significance using the t-test. Also, their post-listing liquidity was examined using the turnover ratio.
In the short-term (7-day) event window, the results indicate that cross-listing announcements have no impact on stock returns, however, in the long-term (61-day) event window, there is reasonable evidence to indicate that cross-listing announcements have a statistically significant negative effect on stock returns.
The results also indicate that cross-listed firms returns outperform those of the non-cross-listed firms with the same market/price-to-book values in both the post-listing short-term (7-day) and long-term (61-day) periods, but the control firms have a higher turnover ratio over the same period. | en |
