Date of Award


Document Type

Campus Access Thesis


Moore School of Business

First Advisor

Steven V Mann


Based on the Legal Bonding Hypothesis, proposed by Coffee and Stulz (1999), cross-listing firms can rent a stringent US regulatory regime to improve shareholder protection. However, the reputation bonding hypothesis, put forth by Siegel (2005), questions the efficacy of enforcing US law on cross-listing firms and instead suggests that firms use cross-listing to build a good reputation in the credit market so that they can survive through economic downturns. In order to differentiate between these two arguments, I analyze corporate risk taking after cross-listing. An Increase in minority shareholder protection implied by the legal bonding hypothesis predicts an increase in corporate risk taking due to less private benefits for insiders after cross-listing. Whereas, according to reputation bonding, firms will be more conservative to maintain a good reputation in the credit market. I find a significant increase in R&D expenditure and significant decline in capital expenditure after cross-listing. These findings suggest a shift from low-risk investment toward more risky investment which provides support for the legal bonding hypothesis.