Analysis on China Concepts Stock’s delisting from U.S. exchanges

Abstract

Under the environment of political pluralization, relationships between countries will affect a firm's future development in the foreign stock market. Delisting decisions made by a company usually reflect its financial condition or current world political and economic situation; thus, it is a hot topic among financial researchers. This paper mainly investigates the influence of the U.S.-China trade war and the financial leverage on U.S.-listed Chinese firms' delisting decisions. This research constructs a logistic regression model and conducts an event study analysis based on data of U.S.-delisted Chinese firms and active Chinese firms in the U.S. exchanges during 2014-2022. Empirical results suggest that U.S.-China trade conflicts harm China Concepts Stocks, contributing to their delisting from U.S. exchanges. Besides, there is an especially negative relationship between Chinese firms’ financial leverage and their delisting from the U.S. stock market, contrasting with our previous knowledge. As for the significance of this research, it will have referential value for those confusing companies and provide some valuable suggestions for their IPO decisions