Intangible investments and voluntary delisting

Henry Agyei-Boapeah, Yuan Wang, Abongeh A Tunyi, Michael Machokoto, Fan Zhang

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Abstract

Drawing on a cost-benefit perspective, this paper explores the relation between information asymmetry and the decision to delist from stock exchanges during periods of uncertainty. Specifically, it investigates the role of firms’ intangible investments and the availability of alternative sources of finance on the decision to delist from foreign stock markets. There is a significant positive relationship between investments in intangible assets and firms’ decision to delist. Moreover, the evidence suggests that the positive intangibles-delisting nexus is accentuated by the availability of alternative sources of financing. Collectively, the results are consistent with the theoretical argument that the higher information asymmetry associated with intangible assets may increase the cost of staying listed on stock exchanges, particularly, in periods of uncertainty (captured in this study by accounting fraud allegations targeting cross-listed firms). The results have important implications for corporate managers, capital market participants, and policy makers.
Original languageEnglish
Pages (from-to)224-243
Number of pages20
JournalInternational Journal of Accounting & Information Management
Volume27
Issue number2
Early online date24 Apr 2019
DOIs
Publication statusPublished - 7 May 2019

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Availability
Finance
Costs
Managers
Uncertainty
Financial markets
Intangibles
Delisting
Stock exchange
Information asymmetry
Intangible assets
Financing
Capital markets
Accounting fraud
Targeting
Cost-benefit
Stock market
Politicians

Keywords

  • Voluntary delisting
  • intangible assets
  • information asymmetry
  • US stock exchange
  • China

Cite this

Agyei-Boapeah, Henry ; Wang, Yuan ; Tunyi, Abongeh A ; Machokoto, Michael ; Zhang, Fan. / Intangible investments and voluntary delisting. In: International Journal of Accounting & Information Management. 2019 ; Vol. 27, No. 2. pp. 224-243.
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abstract = "Drawing on a cost-benefit perspective, this paper explores the relation between information asymmetry and the decision to delist from stock exchanges during periods of uncertainty. Specifically, it investigates the role of firms’ intangible investments and the availability of alternative sources of finance on the decision to delist from foreign stock markets. There is a significant positive relationship between investments in intangible assets and firms’ decision to delist. Moreover, the evidence suggests that the positive intangibles-delisting nexus is accentuated by the availability of alternative sources of financing. Collectively, the results are consistent with the theoretical argument that the higher information asymmetry associated with intangible assets may increase the cost of staying listed on stock exchanges, particularly, in periods of uncertainty (captured in this study by accounting fraud allegations targeting cross-listed firms). The results have important implications for corporate managers, capital market participants, and policy makers.",
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Agyei-Boapeah, H, Wang, Y, Tunyi, AA, Machokoto, M & Zhang, F 2019, 'Intangible investments and voluntary delisting', International Journal of Accounting & Information Management, vol. 27, no. 2, pp. 224-243. https://doi.org/10.1108/IJAIM-12-2017-0146

Intangible investments and voluntary delisting. / Agyei-Boapeah, Henry; Wang, Yuan; Tunyi, Abongeh A; Machokoto, Michael; Zhang, Fan.

In: International Journal of Accounting & Information Management, Vol. 27, No. 2, 07.05.2019, p. 224-243.

Research output: Contribution to journalArticleResearchpeer-review

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T1 - Intangible investments and voluntary delisting

AU - Agyei-Boapeah, Henry

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AB - Drawing on a cost-benefit perspective, this paper explores the relation between information asymmetry and the decision to delist from stock exchanges during periods of uncertainty. Specifically, it investigates the role of firms’ intangible investments and the availability of alternative sources of finance on the decision to delist from foreign stock markets. There is a significant positive relationship between investments in intangible assets and firms’ decision to delist. Moreover, the evidence suggests that the positive intangibles-delisting nexus is accentuated by the availability of alternative sources of financing. Collectively, the results are consistent with the theoretical argument that the higher information asymmetry associated with intangible assets may increase the cost of staying listed on stock exchanges, particularly, in periods of uncertainty (captured in this study by accounting fraud allegations targeting cross-listed firms). The results have important implications for corporate managers, capital market participants, and policy makers.

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