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Investor Recognition, Liquidity, and Exchange Listings in the Reformed Markets
Author(s) -
Jain Pankaj K.,
Kim JangChul
Publication year - 2006
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/j.1755-053x.2006.tb00140.x
Subject(s) - listing (finance) , market liquidity , business , phenomenon , monetary economics , logistic regression , financial economics , cross listing , econometrics , economics , finance , corporate governance , statistics , mathematics , physics , quantum mechanics
We examine multiple facets of firms' descisions to list on the NYSE. Although the average Nasdaq spreads are now comparable to the average NYSE spreads, we find that firms continue to switch from Nasdaq to the NYSE, and that they experience positive cumulative abnormal returns on listing. Using a simultaneous ststem of equations approach, we establish that enhanced investor recognition mainly explains this phenomenon. A logistic regression suggesrts that corporate listing choice is consistent with these findings, since eligible unlisted firms already have high volumes and recognition and might not benefit as much as do firms that actually switch.