Firm productivity in the Energy-electricity sector over the last two decades with crisis: The role of cross-listing

Abstract

Novel to the literature, this study examines how cross-listing impacts firms’ productivity in Energy sector. Annual data of firm cross-listing over the last two decades with crisis (2002-2022) is employed for our analyses. We find evidence of significant drop in productivity after Energy firms (including electricity firms) cross-list in the US market. Meanwhile, we do not find strong evidence of significant decreases in firm productivity from other sectors in our sample. We note one possible explanation for this finding is that after cross-listing, Energy firms appear to utilize their increased capital to heavily invest in infrastructure, equipment, and plants for expansion, which might eventually damage their productivity. To seek for more thorough explanations for such decreases in Energy firms' productivity after cross-listing, we identify the determinants of firm productivity in Energy sector. Our results provide strong evidence that the increases in capital expenditures after Energy firms cross-list appear to be associated with the decreases in firm productivity. Notably, we note that negative impacts of capital expenditures (after cross-listing) and state ownership on firm productivity become much stronger and more statistically significant in developed countries than in emerging countries. Last, corporate governance and firm liquidity are found to be two determinants that help improve firm productivity in both electricity firms and other energy firms.