The determinants of dual listing decision of firms from ASEAN-5

Abstract

This study aims to examine the determinants that encouraged firms to have a dual listing. Practically, there is a noticeable lack of empirical evidence, as well as the situation of the ASEAN markets integration which is going against the theoretical debate raises the need for more empirical studies. As a result, the Generalized Method of Moments (GMM) model was applied to assess the strength determinants that driving the listing abroad decision. The empirical findings indicate that firms from countries with higher trade openness and those suffering from higher illiquidity and ownership concentration are more likely to pursue an additional listing. Likewise, the result also shows that firms originated from countries with lower Foreign Direct Investment (FDI) and reputation tend to seek a dual listing. The result shows that firms that are characterized by higher ROA and those from countries with higher GDP are more encouraged to pursue an additional listing. Meanwhile, firms from countries that are characterized with lower market capitalization are more encouraged to have a dual listing. The insignificant results reported for stock volatility and geographic proximity can be interpreted as a result of the improvement in trading technology. In conclusion, the study contributes to the existing body of knowledge by providing empirical evidence about the power of these motivations which encourage firms to have a dual listing. Equally, the results offer evidence for stakeholders, such as investors, and authorities to attain a better understanding of these determinants.

Keywords

• dual listing
• generalized method of moments