TY  - JOUR
AU  - Benos,Evangelos
AU  - Weisbach,Michael S.
TI  - Private Benefits and Cross-Listings in the United States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10224
PY  - 2004
Y2  - January 2004
UR  - http://www.nber.org/papers/w10224
L1  - http://www.nber.org/papers/w10224.pdf
N1  - Author contact info:
Michael Weisbach
Department of Finance
Fisher College of Business
Ohio State University
2100 Neil Ave.
Columbus, OH  43210
Tel: 614 292 3264
E-Mail: weisbach.2@osu.edu
AB  - In this paper, we review the literature on private benefits and cross-listings in the United States. We first discuss the alternative approaches used to measure private benefits. We survey recent evidence documenting cross-country differences in the levels of private benefits obtained by corporate managers, as well as the country-specific factors associated with high and low private benefits. We then explain how, by cross-listing its stock in a market with high disclosure and regulatory standards such as the United States, a firm can commit to a relatively low level of private benefits in the future. We discuss the circumstances under which managers would choose to cross-list their stocks in the United States, when such a cross-listing has important implications for managers' private benefits. Finally, we survey recent empirical work that tests empirical implications of this bonding view of cross-listings. Overall, this evidence provides a compelling case that the desire to protect shareholders' rights so as to facilitate access to equity markets is one of a number of reasons why firms choose to cross-list their stocks in the United States.
ER  -