Banti, Chiara and Biddle, Gary and Jona, Jonathan (2023) Does a Liability of Foreignness in Liquidity Apply to US IPOs? Accounting and Business Research, 54 (4). pp. 423-456. DOI https://doi.org/10.1080/00014788.2022.2150595
Banti, Chiara and Biddle, Gary and Jona, Jonathan (2023) Does a Liability of Foreignness in Liquidity Apply to US IPOs? Accounting and Business Research, 54 (4). pp. 423-456. DOI https://doi.org/10.1080/00014788.2022.2150595
Banti, Chiara and Biddle, Gary and Jona, Jonathan (2023) Does a Liability of Foreignness in Liquidity Apply to US IPOs? Accounting and Business Research, 54 (4). pp. 423-456. DOI https://doi.org/10.1080/00014788.2022.2150595
Abstract
We provide evidence regarding two unanswered and consequential questions regarding share trading liquidity, a primary motive for US listings, for the prominent listing cohort of foreign-firm US initial public offerings (FIPOs). First, we test whether FIPOs exhibit a ‘liability of foreignness (Bell et al. 2012) in liquidity’ (LFL) compared with matched domestic-firm IPOs (DIPOs), despite listing requirements that are more stringent than for the mature cross-listed foreign firms studied previously. Second, we test whether US IPO LFL is moderated by FIPO home country institutional attributes that promote liquidity. Our findings for 327 FIPOs from 36 countries between 1990 and 2012 reveal that US IPO LFL is moderated, but not eliminated, by FIPO home country attributes, thus indicating incomplete bonding with US institutions. These findings extend prior research and serve to inform foreign firms considering US IPOs, exchanges competing for them, listing facilitators, regulators, and investors regarding a salient listing consideration.
Item Type: | Article |
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Uncontrolled Keywords: | Foreign Listings, Initial Public Offerings, Liquidity, Liability of Foreignness; foreign listings; initial public offerings; liquidity; liability of foreignness |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 04 Nov 2022 12:02 |
Last Modified: | 04 Jul 2024 01:00 |
URI: | http://repository.essex.ac.uk/id/eprint/33798 |
Available files
Filename: Does a Liability of Foreignness in Liquidity Apply to US IPOs_FINAL.pdf