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http://ssrn.com/abstract=1789203
 
 

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Exchange Trading Rules, Governance, and Trading Location of Cross-Listed Stocks


Douglas J. Cumming


York University - Schulich School of Business

Mark Humphery-Jenner


UNSW Australia Business School; Financial Research Network (FIRN); Centre for International Finance and Regulation (CIFR)

Eliza Wu


University of Technology, Sydney - UTS Business School; Financial Research Network (FIRN); Centre for International Finance and Regulation (CIFR)

March 17, 2011

24th Australasian Finance and Banking Conference 2011 Paper
2012 Financial Markets & Corporate Governance Conference

Abstract:     
This paper shows stock exchange trading rules are of central importance for the trading location of cross-listed stocks. We consider various measures of sovereign governance and shareholder rights across countries to assess the complementary effects of other legal and institutional drivers of trading activity. The data indicate that the proportion of trades that occurs on an exchange increases at a decreasing rate with the strength of stock exchange trading rules. The effectiveness of stock exchange rules increases with the strength of regulatory institutions in the country hosting the stock exchange. Furthermore, corroborating with our full sample findings, difference-in-difference tests indicate the promulgation of MIFID, which strengthened trading rules within the European Union (EU), has increased the amount of trade in the EU.

Number of Pages in PDF File: 48

Keywords: cross-listing, governance, trading rules, law and finance

JEL Classification: G15, G38, K22

working papers series


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Date posted: March 23, 2011 ; Last revised: March 8, 2013

Suggested Citation

Cumming, Douglas J. and Humphery-Jenner, Mark and Wu, Eliza, Exchange Trading Rules, Governance, and Trading Location of Cross-Listed Stocks (March 17, 2011). 24th Australasian Finance and Banking Conference 2011 Paper; 2012 Financial Markets & Corporate Governance Conference. Available at SSRN: http://ssrn.com/abstract=1789203 or http://dx.doi.org/10.2139/ssrn.1789203

Contact Information

Douglas J. Cumming
York University - Schulich School of Business ( email )
4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
HOME PAGE: http://www.venturecapitalprivateequitycontracting.com/
Mark Humphery-Jenner (Contact Author)
UNSW Australia Business School ( email )
Sydney, NSW 2052
Australia

Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Centre for International Finance and Regulation (CIFR) ( email )
Level 7, UNSW CBD Campus
1 O'Connell Street
Sydney, NSW 2000
Australia

Eliza Wu
University of Technology, Sydney - UTS Business School ( email )
Haymarket, Ultimo
PO Box 123
Sydney, NSW 2007
Australia
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Centre for International Finance and Regulation (CIFR) ( email )
Level 7, UNSW CBD Campus
1 O'Connell Street
Sydney, NSW 2000
Australia

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