The following table (Roosenboom and van Dijk, 2009) shows how average share prices jump (in percentage) after the announcement that the stocks will be cross-listed. The price response should be interpreted as corrected for general market movements that happened on the same day:

	Markets in which companies cross-listed their shares
	US	UK	Continental Europe	Japan
Price response	+1.3%	+1.1%	+0.6%	+0.5%

Although these numbers appear small, it is important to realize that announcements of domestic seasoned equity issues lead to an average negative price response of 2% to 3%.

Answer the following two questions:

1) Provide a short explanation of the average negative price response to domestic seasoned equity issuance.

2) Given the positive price response to cross listing, why doesn't every company cross-list?