1. Cross-listing Sun Yubei

2. Article 1: Corporate governance, agency problems and international cross-listing: a defense of the bonding hypothesis —— G. Andrew Karolyi

3. What is cross-listing? Cross-listing is usually a strategic choice made by a firm to list its equity shares on one or more exchanges, in addition to its domestic exchanges.

4. Motivations Market segmentation Investor recognition Market liquidity Bonding hypothesis

5. Market segmentation hypothesis barriers Regulatory restrictions Costs problems Investor preference… Information problems

6. When the investment barrier is higher: Market segmentation hypothesis Segmented market Share’s owned by local investors Higher risk Super risk compensation Higher capital cost More Cross- listing

7. more liquid equity markets could lead to an increase in the liquidity of the stock and a decrease in the cost of capital. Market liquidity

8. Investor recognition

9. Investor protection cross-listing in higher standard market acts as a bonding mechanism used by firms (that are incorporated in a jurisdiction with poor investor protection and enforcement systems to) commit themselves voluntarily to higher standards of corporate governance. In this way, firms attract investors who would otherwise be reluctant to invest. Bonding hypothesis

10. Disadvantages pressure on executives for public scrutiny reporting and disclosure requirements scrutiny by analysts in advanced market Listing fees

11. Some financial media have argued that the implementation of the Sarbanes-Oxley act in the United States has made the NYSE less attractive for cross-listings, but recent academic research finds little evidence to support this.Sarbanes-OxleyNYSE

12. The Sarbanes–Oxley Act of 2002 is a United States federal law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. The bill was enacted as a reaction to a number of major corporate and accounting scandals. sox

13. top management must individually certify the accuracy of financial information penalties for fraudulent financial activity are much more severe increase the independence of the outside auditors who review the accuracy of corporate financial statements increase the oversight role of boards of directors sox

14. Opponents of the bill have claimed it has reduced America’s international competitive edge against foreign financial service providers, because it has introduced an overly complex regulatory environment into U.S. financial markets. sox

15. Thanks for attention!!