Can Cross Listing Enhance the Investment Sensitivity to Stock Price? A Test based on the Management Learning Hypothesis

Abstract

Abstract: This paper analyzes the impact of cross listing on investment sensitivity to stock price by using the data of Chinese listed companies in the past ten years after the reform.The results show that the implementation of A+H cross listing can enhance the investment sensitivity to stock price of the company, which indicates that the management of the company can obtain more relevant information from the stock price which is helpful to evaluate the investment decision. This conclusion is consistent with the management learning hypothesis.Further considering the signaling effect from stock price to investment, we find that the effect of A+H cross-listing on investment sensitivity to stock price is more significant in the enterprise group with high institutional shareholding ratio, high analyst attention and high stock price information content. According to the management learning ability hypothesis, the longer the executive team′s overall tenure, the more sensitive the firm′s investment is to the stock price after cross listing.

Key words: cross-listing, investment sensitivity to stock price, management learning hypothesis, stock price information content

WANG Yi-han1,2,WANG Zhen-kun1. Can Cross Listing Enhance the Investment Sensitivity to Stock Price? A Test based on the Management Learning Hypothesis [J]. 商业研究.

References

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