摘要
Dual-listed firms simultaneously follow the relevant rules in their home country and in their cross-listed country.In contrast,other firms only listed in the cross-listed country are only subject to the local regulations.Previous literature has found evidence that cross-listing can improve firms' information transparency because of more stringent listing rules in the cross-listed country.The existing research,however,has not paid enough attention to the potential influence of dual-listed firms and their home country institutional factors(e.g.unique disclosure policies) on other firms only listed in the cross-listed country(i.e.spillover effect).In the Hong Kong market,Chinese dual-listed firms are under the mandatory profit warning regulation of China's Mainland,but other firms listed only in Hong Kong only need to follow the voluntary disclosure rule of the Hong Kong Stock Exchange.Such a setting provides us with the opportunity to investigate a spillover effect,i.e.whether these Chinese dual-listed firms influence their peers only listed in Hong Kong to release profit warnings.We find that firms only listed in Hong Kong are more likely to issue profit warnings if their Chinese dual-listed peers have also issued warnings.We further find that this spillover effect increases with the market capitalization of Chinese duallisted firms and increases with the market share of these firms before they dominate the industry.Lastly,due to an underlying duty to disclose material information in Hong Kong,the spillover effect is weaker for firms with large earnings surprises.
Dual-listed firms simultaneously follow the relevant rules in their home country and in their cross-listed country.In contrast,other firms only listed in the cross-listed country are only subject to the local regulations.Previous literature has found evidence that cross-listing can improve firms' information transparency because of more stringent listing rules in the cross-listed country.The existing research,however,has not paid enough attention to the potential influence of dual-listed firms and their home country institutional factors(e.g.unique disclosure policies) on other firms only listed in the cross-listed country(i.e.spillover effect).In the Hong Kong market,Chinese dual-listed firms are under the mandatory profit warning regulation of China's Mainland,but other firms listed only in Hong Kong only need to follow the voluntary disclosure rule of the Hong Kong Stock Exchange.Such a setting provides us with the opportunity to investigate a spillover effect,i.e.whether these Chinese dual-listed firms influence their peers only listed in Hong Kong to release profit warnings.We find that firms only listed in Hong Kong are more likely to issue profit warnings if their Chinese dual-listed peers have also issued warnings.We further find that this spillover effect increases with the market capitalization of Chinese duallisted firms and increases with the market share of these firms before they dominate the industry.Lastly,due to an underlying duty to disclose material information in Hong Kong,the spillover effect is weaker for firms with large earnings surprises.
