US Listing Helps Raising Funds Elsewhere
A July 22 article in the US edition of The Economist cited research by Professor of Finance Michael Weisbach. The article looked at the reasons why foreign firms are increasingly passing up listing their companies on US exchanges. Says the article, which is not available to the general public: "Big deals that would once have come to New York have gone elsewhere." Among the reasons cited in The Economist article: the "toxic" legal environment in the US and the smaller gap in transaction costs between the US and other exchanges.
A 2004 paper by Weisbach, who holds the Golder Distinguished Chair in Corporate Finance, concluded that foreign companies listing in US find that they have an easier time raising money in their home country. Other research reached a similar conclusion, citing the higher degree of transparency and the "higher governance standard" in the US.