The Impact of Exchange Listing on Corporate Governance: Evidence from Direct Listings

61 Pages Posted: 12 Jun 2018 Last revised: 9 Jun 2021

See all articles by Dan W. French

Dan W. French

Lamar University; University of Missouri at Columbia

Andrew E. Kern

University of Missouri - Trulaske College of Business

Thibaut G. Morillon

Elon University

Adam S. Yore

University of Missouri at Columbia - Department of Finance

Date Written: June 8, 2021

Abstract

Direct listings are a new, but unproven method of going public for industrial firms. We use prior
direct listings by public non-listed REITs (PNLRs) to explore the impact of exchange membership
on corporate governance. We are the first to study companies with publicly owned, but non-listed
shares in a unique setting where the influence of listing is distinct from the confounding effect of
capital raising that is inherent in a traditional IPO. Evidence suggests younger, more profitable
companies with stronger governance and professional management are more likely to directly list.
Moreover, we find internal corporate governance improves beyond the exchange’s requirements
upon listing. Institutional ownership also increases following the listing and we confirm these
changes are not due to capital raising.

Keywords: direct listing, exchange listing, corporate governance, IPO, REIT, PNLR

JEL Classification: G23, G32, G34

Suggested Citation

French, Dan W. and Kern, Andrew E. and Morillon, Thibaut and Yore, Adam S., The Impact of Exchange Listing on Corporate Governance: Evidence from Direct Listings (June 8, 2021). Available at SSRN: https://ssrn.com/abstract=3185065 or http://dx.doi.org/10.2139/ssrn.3185065

Dan W. French

Lamar University ( email )

PO Box 10745
Beaumont, TX 77710
United States
409-880-8603 (Phone)

University of Missouri at Columbia ( email )

Columbia, MO Columbia 65211
United States

Andrew E. Kern

University of Missouri - Trulaske College of Business ( email )

403 Cornell Hall
Columbia, MO 65211
United States

Thibaut Morillon

Elon University ( email )

Elon, NC 27244
United States

Adam S. Yore (Contact Author)

University of Missouri at Columbia - Department of Finance ( email )

403 Cornell Hall
Columbia, MO 65211
United States
573-884-1446 (Phone)

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