An Investigation into the Challenges Affecting Cross Listing of Public Listed Companies in East Africa Community
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Date
2009
Authors
Egondi, Obinga Patrick
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
The purpose of the research was aimed at providing background on the current status of
capital market integration with an analysis on the public listed companies in East Africa
in relation to cross listing. Specifically the study investigated the challenges of cross
listing of the public listed companies in the region adopting a descriptive design.
Literature published in the area was reviewed on the existing relationships concerning the
cross listings and found the existence of slow pace and few cross listings. Stratified and
Quota Sampling techniques were used to study the companies and collecting primary data
through questionnaire was administered by the researcher.
Collected data was analyzed using Descriptive Statistics and MS Excel for simple data
analysis to identify the relationship.
The study specifically investigated how firm-level, sOClOeconomic environment and
institution-level factors limits the choices of whether and where to cross-list.
Regarding- the influence of firm-level characteristics, the study reveals that majority of
the public listed firms take into consideration size, foreign sales and not having sizeable
tradable goods, and a high level of private benefits.
Regarding the effect of institution-level characteristics, the study found that listed firms
in East Africa Markets are less likely to cross-list because their markets are faced with
illiquidity and inefficiency, poor reputation, high concentration and infrastructure and
still dwell on primitive domestic equity market and small to hold such kind of offering.
The study identified that social economic variable; Market risk and inefficiency, high
liquidity risk, stricter disclosure standards, poor access to capital markets, existence of
politically protected markets limits public listed firms from making cross listing decision.
The data also indicate no differences in the factors affecting cross-listing decisions across
the East Africa Public listed firms according to country. This proves that public listed
firms in East Africa are still developing (in the developing economies).
The study recommends the need to enhance the efficiency and efficacy of public listed
firms in there cross listing decision since it is value enhancing and concludes that crosslisting
premium arises from commitments of all parties though Results are inconclusive
regarding the impact of private capital flows on cross listing decisions.
Description
A Research Project Submitted in Partial Fulfilment of the Requirements for the Degree of Master of Business Administration of Kenyatta University, April, 2009