The Litigation Cost of Cross‐Listing Into the United States

IF 4.6 3区管理学 Q1 BUSINESS

Corporate Governance-An International Review Pub Date : 2024-08-10 DOI:10.1111/corg.12610

M. Martin Boyer

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引用次数: 0

Abstract

Research Question/IssueI study the expected liability cost of cross‐listing into the United States by examining the change in the structure of a Canadian firm's directors' and officers' liability insurance contract (D&O insurance) before and after cross‐listing on an exchange located in the United States (NYSE, NASDAQ, or OTC).Research Findings/InsightsResults show that neither the likelihood of having D&O liability insurance increases significantly only when the NASDAQ is the chosen as the cross‐listing venue nor the amount of coverage changes significantly after cross‐listing. With respect to choosing the NYSE as the cross‐listing venue, results show that coverage does not increase, but the premium does. As a result, the D&O insurance premium per dollar of coverage increases significantly only when the firm cross‐lists on the NYSE. A robust point estimate is that a Canadian firm's D&O liability insurance premium increases by 40%–60% when it becomes listed on a US market.Theoretical/Academic ImplicationsD&O insurers adjust their expected litigation costs as a function of where shares are traded not because of the severity of damages paid in the event of litigation, by mostly because of an increase in the frequency of such litigation.Practitioner/Policy ImplicationsIf D&O premium‐to‐coverage ratio allows one to measure a company's litigation risk, then there would be value to investors to have access to basic D&O insurance information such as the premium and the coverage.

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在美国交叉上市的诉讼成本

研究结果/见解研究结果表明，只有在选择纳斯达克作为交叉上市地时，投保 D&O 责任保险的可能性才会显著增加，交叉上市后保险金额也不会发生显著变化。对于选择纽约证券交易所作为交叉上市地的情况，结果显示承保范围没有增加，但保费却增加了。因此，只有当公司在纽约证券交易所交叉上市时，每美元的 D&O 保险费才会大幅增加。一个可靠的点估计是，当一家加拿大公司在美国市场上市时，其 D&O 责任保险的保费会增加 40%-60%。理论/学术启示D&O 保险公司调整其预期诉讼成本是股票交易地点的函数，而不是因为发生诉讼时赔偿损失的严重程度，主要是因为此类诉讼的频率增加了。实践者/政策含义如果 D&O 保险费与承保范围的比率可以衡量一家公司的诉讼风险，那么投资者就有必要了解 D&O 保险的基本信息，如保险费和承保范围。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Corporate Governance-An International Review Multiple-

CiteScore

7.00

自引率

11.30%

发文量

期刊介绍： The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.