On the Fortunes of Stock Exchanges and Their Reversals: Evidence from Foreign Listings
44 Pages Posted: 7 Aug 2008 Last revised: 30 Oct 2018
Date Written: August 11, 2012
Using a sample that provides unprecedented detail on foreign listings for 29 exchanges in 24 countries starting from the early 1980s, we show that although firms list in countries with better investor protection, they are less likely to list in countries with excessively stronger investor protection. We provide evidence based on ex ante firm and market characteristics and ex post listing outcomes that our findings are due to lack of investor interest in firms from environments with much weaker investor protection. We also argue that our findings, together with a general trend of improvement in investor protection in many firms’ countries of origin, can explain why U.S. and U.K. exchanges have attracted an increasing number of foreign listings during our sample period.
Keywords: Cross-listings, investor protection, investor interest
JEL Classification: G15, G38, M41, M45, F40
Suggested Citation: Suggested Citation