Why Do Chinese Companies Seek Overseas Listings?

Chapter 3 investigates the reasons why many Chinese companies have decided to seek cross-border listings in the past three decades. It examines a variety of relevant theories, such as legal bonding, private benefits and market fragmentation and evaluates the extent to which they may apply to the case of Chinese companies. The overseas listing of Chinese companies offers a good case study due to the apparent disparity between China’s regulatory regime and those in the listing places. However, existing empirical research shows ambiguous or, at best, weak effects of legal bonding. This calls for a closer examination of how to interpret these empirical results and why the legal bonding effect is not as strong as expected.