Listing Advantages Around the World

Abstract

Using the firm-level data of 33 countries over 10 years (2008{2017), we find that the listed firms have lower returns on assets than the similar unlisted firms, in most countries. The result is associated with a higher capital-labor ratio of listed firms, implying that the listed firms face less financial constraints. Moreover, we investigate the institutional factors that exacerbate or mitigate the listing advantages (i.e., ROA difference) across the countries. Compared to English origin, German and Scandinavian law countries strongly narrow the listing advantages but the French law origin shows mixed results. Overall, the listing advantages seem narrowed with stronger creditor’s rights but show unclear associations with the strength of corporate governance.