Financial leverage and competitive strategy of cross-listing firms

Chi Lin Yang, Min-Hsien Chiang, Chien Wei Chen

Research output: Contribution to journalArticle

Abstract

This study investigates the relationship between financial leverage and competitive strategies based on the investigation into the cross-listing announcements, through which the financial condition of a firm might shape the competition outcome. The empirical evidence shows that cross-listing announcements normally attract positive market responses to cross-listed firms but incur negative market responses to rival firms, especially upon the strategic substitutes competition. Cross-listed firms obtain more positive market responses if their financial leverage is lower, but the firms have no advantages when they are financially constrained. Less leveraged rival firms could weaken the negative impact and even gain positive market responses upon the strategic complements competition.

Original languageEnglish
Pages (from-to)306-324
Number of pages19
JournalAustralian Journal of Management
Volume44
Issue number2
DOIs
Publication statusPublished - 2019 May 1

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Competitive strategy
Financial leverage
Cross-listing
Market response
Announcement
Empirical evidence
Financial condition
Strategic substitutes
Strategic complements

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)

Cite this

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Financial leverage and competitive strategy of cross-listing firms. / Yang, Chi Lin; Chiang, Min-Hsien; Chen, Chien Wei.

In: Australian Journal of Management, Vol. 44, No. 2, 01.05.2019, p. 306-324.

Research output: Contribution to journalArticle

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