|Cross-listing; Chinese stock market; Hong Kong stock market; Market performance; Operating performance
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This study investigates the long-run stock market and operating performance of Chinese firms cross-listed on the Hong Kong stock exchange over the period of 1993-2012. First, this study finds abnormal returns of cross-listing stocks have generally been negative and decreased in three years after cross-listing for the full sample-period. However, in the most recent sub-period samples, abnormal returns have been positive. The result indicates post-cross-listing abnormal returns could be time-dependent. Second, profitability of cross-listed firms also decreases and does not outperform their purely domestic-listed peers in three years after cross-listing in the full sample-period. Nevertheless, in the most recent sub-period samples, the dynamic changes in operating performance show that cross-listed firms have also performed better than their purely domestic-listed peers. The results seem to suggest that post-cross-listing performance of Chinese firms could be subject to the structural improvement of the Chinese financial market.