Library Dissertation Showcase

Do dual listed companies help investors to obtain the understanding towards Efficient Market Hypothesis at the time of taking investment decisions?

  • Year of Publication:
  • 2021

This dissertation analyse the theories involved with dual listed companies and the Efficient Market Hypothesis. Five companies from Argentina, which trade in the Argentinian index the Merval and the American index NYSE and NASDAQ, were selected for the research to observe if dual listed companies could convey the market efficiency. In addition, this should provide shareholders with the neat data towards their investment decisions. Nevertheless, it is observed that the investment trends, may only provide the correct form of efficiency depending on the economic situation both countries the US and Argentina are currently in.

The event study will be done at different points in the five years range selected, to analyse the effects of dual listed companies. This takes different events such as the period before and during the presidential election in Argentina, Covid-19, and the whole range of data from 2015 to beginning of 2021. Furthermore, an individual analysis is done on each company to comprehend their performance on other events, related to companies’ situation. For this analysis to be done it was necessary to calculate the abnormal return of each company through over five years period, as this research just covers until March of 2021. After obtaining the abnormal return, the Cumulative Abnormal Return of five days was used to analyse those short-term effects. Lastly the Mean has been calculated to obtain an average on the returns related to the specific event selected.

It was found that dual listed companies do not seem to possess the relationship excepted, the Efficient Market Hypothesis may not be the same one in both countries, but opposite at the time for investors in each country to decide when to invest on those companies. The business cycle seems to only synchronise, as long as, the economic situation affects globally as the cases that are seen individually for each company further in this research.

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