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Cross-listing and pricing efficiency: The informational and anchoring role played by the reference price
Eric C. Chang1; Yan Luo2; Jinjuan Ren3
2013-11
Source PublicationJournal of Banking & Finance
ISSN0378-426
Volume37Issue:11Pages:4449-4464
Abstract

When a firm cross-lists its shares in segmented markets, the price of the first issued share, as a reference, plays both an informational and anchoring role in pricing the second issued share. We develop a model illustrating the dual-role. Empirically, we examine a group of Chinese firms that first issue foreign sharesand then domestic A-shares, for which the anchoring effect adds to the A-share underpricing. Consistentwith the model predictions, we find that the A-share underpricing is positively related to the difference incosts of capital in the two segmented markets, and that this positive association is weaker when participants are less likely to resort to the anchoring heuristic and when the A-share valuation involves less uncertainty.

KeywordCross-listing Ipo Underpricing Segmented Market Anchoring
DOIhttps://doi.org/10.1016/j.jbankfin.2012.12.018
Indexed BySSCI ; CPCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance ; Economics
WOS IDWOS:000326212100033
PublisherElsevier
Fulltext Access
Citation statistics
Cited Times [WOS]:16   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorEric C. Chang
Affiliation1.Faculty of Business and Economics, The University of Hong Kong, Pokfulam Road, Hong Kong
2.School of Management, Fudan University, No. 670 Guoshun Road, Shanghai 200433, China
3.Faculty of Business Administration, University of Macau, Av. Padre Tomás Pereira, Taipa, Macau, China
Recommended Citation
GB/T 7714
Eric C. Chang,Yan Luo,Jinjuan Ren. Cross-listing and pricing efficiency: The informational and anchoring role played by the reference price[J]. Journal of Banking & Finance,2013,37(11):4449-4464.
APA Eric C. Chang,Yan Luo,&Jinjuan Ren.(2013).Cross-listing and pricing efficiency: The informational and anchoring role played by the reference price.Journal of Banking & Finance,37(11),4449-4464.
MLA Eric C. Chang,et al."Cross-listing and pricing efficiency: The informational and anchoring role played by the reference price".Journal of Banking & Finance 37.11(2013):4449-4464.
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