Journal of Economics and Finance

, Volume 38, Issue 3, pp 383–406

Cross listing, disclosure regimes, and trading volume sensitivity to stock returns


DOI: 10.1007/s12197-011-9222-7

Cite this article as:
Zhou, H. & Owusu-Ansah, S. J Econ Finan (2014) 38: 383. doi:10.1007/s12197-011-9222-7


In this paper, we propose that investors of cross-listed firms use trading volume to revise their perception of firms’ value. We further propose that firms that cross list from low-disclosure regimes (usually from emerging economies) have higher trading volume sensitivity to returns than those that cross list from high-disclosure regimes (usually from developed economies), as those from low-disclosure regimes have relatively lax and less stringent disclosure requirements. We use a sample of foreign firms that are cross listed in the U.S. as exchange-listed American Depositary Receipts, adopted the international financial reporting standards (formerly international accounting standards), and filed Form 20-F reconciliation with the U.S. Securities and Exchanges Commission during the period of 1994–2005. Using these firms and a matched-sample of U.S. firms based on exchange, industry and firm size, we document results supporting our hypotheses. Our results have implications for policy makers, regulators and academics.


Cross Listing Accounting Disclosure Stock Returns Trading Volume Trading Volume Sensitivity to Stock Returns. 

JEL classification

M41 G12 

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Department of Accounting and Business Law, College of Business AdministrationThe University of Texas–Pan AmericanEdinburgUSA
  2. 2.Department of Accountancy, UHB 4077, College of Business and ManagementUniversity of Illinois SpringfieldSpringfieldUSA

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