ANALYSIS ON CROSS-LISTING MOTIVATIONS OF CHINESE ENTERPRISES: A PERSPECTIVE OF BEHAVIORAL HETEROGENEITY

In consideration of the poor explanation of traditional cross-listing motivation theories in the heterogeneous cross-listing behaviours of Chinese enterprises, this study aims to search for a reasonable explanation for cross-listing motivations from the perspectives of capital cost, private benefits of control, and product market competition strategy. In this study, 49 Chinese enterprises, which were simultaneously listed as A-shares in Chinese stock exchanges and H-shares in Hong Kong Stock Exchange from 1993 to 2017, were chosen and divided into "outside-in" and "inside-out" cross-listing groups. The effects of capital cost, private benefits of control, separation degree between the capital and product markets, and domestic product market share on the cross-listing behaviours of Chinese enterprises were verified on the basis of such samples through multiple regression estimations by using the cross-listing dummy variable as a dependent variable. Results show that reducing the capital cost, relieving the separation degree between the capital and product markets, and consolidating the domestic market share are the cross-listing motivations for Chinese enterprises to return and cross-list in their domestic stock market, whereas relieving the separation degree between the capital and product markets, and alleviating the increasing saturated domestic product market are the cross-listing motivations for Chinese enterprises to go abroad and cross-list in overseas stock markets. However, the motivation of the private benefits of control has no remarkable impacts on the two types of cross-listing behaviours. These conclusions explain why Chinese enterprises "return" to execute cross-listing and provide new dimensions to interpret cross-listing motivations, performing as an extension of the existing cross-listing motivation theories.