An Empirical Study On The Effect Of Cross - Listing On The Effectiveness Of Internal Control

Under the background of economic globalization, capital markets of all countries（regions） will more closely linked, on the basis, cross listing has gradually emerged and developed. In recent years, as China’s rapid economic development, many Chinese companies listing in foreign stock exchange are returning to domestic markets for cross-listing, and some companies listing in domestic exchange choose to cross-listed foreign securities markets, cross-listed companies in China have increased significantly. Cross listed companies will be subject to multiple regulatory, and in order to strive to maintain and improve their own reputation and to show good prospects, companies need to guard against all kinds of risks. As an important means of risk prevention, the internal control in the companies is becoming more and more important. Study on the effects of cross-listing on internal control of enterprises in China have important significance.Based on binding hypothesis, for reference to related research results, and combined with China’s actual situation to study the effects of cross-listing on the effectiveness of internal control. In this paper, the study selectes the cross-listed companies in Hong Kong or United States during 2011-2013 as samples, and selectes similar non cross-listed companies as paired samples for comparative analysis. First, using descriptive statistical methods, correlation analysis, regression analysis to study whether the internal control effectiveness of cross-listed companies is better, then to analysis whether cross-listing can promot the relations between internal control effectiveness and internal control disclosure quality, board size, board independence, concentration of ownership.Empirical results indicate that internal control effectiveness of cross-listed companies is better than non cross-listed companies; the promotion of internal control disclosure quality can improve internal control effectiveness, and cross-listing can adjust the promoting role; board size is negatively correlated with internal control effectiveness; the correlation between board independence and internal control effectiveness positive correlation, and cross-listing can improve their relationship; the negative correlation between concentration of ownership and internal control, there was no difference in two groups. In addition, according to the study, this paper also make some implication for government and companies.