David Haushalter

A survey of evidence on domestic and international stock exchange listings with implications for markets and managers

Abstract As new equity markets continue to emerge worldwide, the topic area of stock exchange listings has sparked interest among financial scholars and corporate managers alike. In this article, we review and synthesize empirical studies that examine both new and dual international and intranational listings of common stocks. The studies that we review have been conducted to provide managers and policy makers with information about the effects of listing on stock prices and to use listings as a venue to provide insights about market organization, market micro-structure, factors that determine stock prices and returns, and international capital market integration. In general, new listings are associated with an increase in stock value and no change in risk.

Is There Shareholder Expropriation in the U.S.? An Analysis of Publicly-Traded Subsidiaries

This paper examines the relation between the performance and valuations of publicly-traded subsidiaries in the United States and the ownership stake of their parent companies. Cross-sectional and time-series tests demonstrate that subsidiaries in which the parent owns a substantial minority stake exhibit negative peer-adjusted operating performance and are valued at a 23% median discount relative to peers. In contrast, majority-owned and fully divested subsidiaries show no abnormal performance or valuations. The results of our study indicate that the association between parent ownership and subsidiary performance is nonlinear and that some parents do, in fact, behave opportunistically toward their publicly traded subsidiaries.

When Does Cash Matter? Evidence for Private Firms

Using a database of more than 180,000 private companies from 2000 to 2009, we find that the benefits of holding more cash vary substantially with a firm’s size and the conditions it faces. Cash holdings matter most for small firms: when there are negative shocks to industry or macroeconomic conditions, a small firm’s cash holdings are positively associated with changes in its sales and assets. Cash is less important for other conditions. Differences in the benefits of cash holdings between large and small firms are traced to a firm’s ability – and willingness – to increase leverage when there is a cash shortfall.