Problem:
The internationalization of capital markets suggests that the world is moving toward an integrated, global capital market (and away from segmented domestic markets). Currently, multinational firms often list their stocks on foreign stock exchanges, an activity referred to as cross listing. For example, Sony cross-lists its Japanese stock on the New York Stock Exchange. In many circumstances, the process of cross listing can be expensive. What motivates companies to cross-list their stocks? What are the perceived benefits of cross listing, and why do these benefits exist? Answer as fully and as carefully as you can.