Asian Review of Financial Research Vol.33 No.4 pp.465-490 https://www.doi.org/10.37197/ARFR.2020.33.4.1
Cross-listing and the Value of Corporate Cash Holdings : Evidence from China
Key Words : Cross-listing,Chinese AH share,Cash holdings,Corporate governance,Chinese split-share reform
This paper examines how cross-listing of Chinese A- and Hong Kong H-shares (AH cross-listed) affects the value of corporate cash holdings. Using a sample of AH cross-listed firms, we find that the value of cash holdings is higher for cross-listed than for non-cross-listed firms. The results remain robust to alternative measures of change in cash and consideration of state-owned enterprises. The AH cross-listing valuation premium for cash holdings decreases after a governance reform in the Chinese stock market. Our results suggest that AH cross-listing enhances firms' transparency and disclosure, and thereby the value of cash holdings relative to non-cross-listed companies.