Dual Listing And Firm Performance

The trend of global integration becomes the consensus of all kinds of enterprise. More and more Chinese enterprises begin to enter the international capital market. Chinese companies listed overseas also has a huge growth. Dual listing can bring many benefits, such as low-cost financing, financing convenience brought by the shorten time to market, improving recognition so as to expand overseas markets. In addition, overseas markets that require higher information disclosure and corporate governance can help enterprises carry out standardized operation, so as to improve the enterprise value.As an emerging market, the impetus of overseas listing and the impact on the performance are more complicated. The dual listing companies in the literature are listed in the domestic first and then listed abroad. Through issuing shares in more developed capital market can reduce the negative effects brought by the market segmentation and can bond with stringent listing requirements and information disclosure. However, most of the A + H companies listed in Hong Kong first and then return to the mainland market. Weather the A + H companies is in line with the binding hypothesis or market segmentation hypothesis, and weather the dual listing will bring performance improvement still needs to be confirmed. In recent years, a number of Chinese companies are delisted. This phenomenon makes us doubt whether overseas listing meet bonding hypothesis? Based on the date of A+H shares and the date of shares during 1993-2010, this paper investigates the impact of dual listing on firm performance by using regression analysis and pair analysis.The results show that dual listing on the mainland and Hong Kong can reduce the market segmentation, but fail to improve the firm performance. This paper does not find any evidence supporting that dual listing on the mainland and Hong Kong complies with bonding hypothesis.Conclusion of this paper will contribute to the continuous improvement of the capital market, system construction, and helping to narrow the gap with the developed capital market.