Benefits for a company to cross-list its equity shares

Explain the benefits you can think of for a company to (a) cross-list its equity shares on more than one national exchange, and, (b) to source new equity capital from foreign investors as well as domestic investors.

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A MNC which has a product market presence or manufacturing facilities in various countries may cross-list its shares on exchanges of these same countries since there is typically investor demand for the shares of companies which are known within the country.  Moreover, a company may cross-list its shares on the foreign exchanges to broaden its investor base and thus, to increase the demand for the stock.  This rise in demand will generally increase the stock price and advances its market liquidity. Broader investor base can also mitigate the possibility of the hostile takeover.  Moreover, cross-listing a company’s shares establishes name recognition and thus facilitates sourcing new equity capital in these foreign capital markets.

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