When Rivals Take the Leap: Peer Pressure and Cross-listing Decisions

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Abstract
This study examines the role of competitive peer influence in shaping firms' cross-listing decisions. Using a comprehensive dataset of U.S. public firms, we find that companies are more likely to cross-list following a competitor' s recent cross-listing. The peer effect is more salient among firms facing intense competitive pressure, exhibiting low levels of financial reporting opacity, and characterized by strong corporate governance. Our analysis reveals that follower firms capitalize on the information spillovers generated by pioneering cross-listed firms, thereby gaining a competitive advantage in areas such as R&D investment, tangible asset accumulation, and cash holdings. To address potential endogeneity concerns, we employ quasi-natural experimental designs that provide robust empirical evidence in support of our findings.

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