Bonding, Firm Value and Liquidity: An Analysis of Migrations Between the AIM and the Official List of the London Stock Exchange

56 Pages Posted: 15 May 2010 Last revised: 18 Jun 2011

See all articles by Kevin Campbell

Kevin Campbell

University of Stirling - Stirling Management School

Isaac T. Tabner

University of Stirling - Accounting and Finance Division

Date Written: June 15, 2011

Abstract

Firms changing their listing from the less regulated AIM to the more regulated main section of the London Stock Exchange exhibit positive returns on the day the decision is announced, while for firms moving in the opposite direction both announcement and implementation day returns are negative. Following implementation, the pattern of returns is reversed for both categories of firm. Some of the changes in returns reflect changes in liquidity, while the remainder reflect adjustments to the cost of capital resulting from different bonding requirements and agency risks between the two listing regimes.

Keywords: Corporate Governance, Change of Listing, Agency Costs, Agency Risk, Bonding Costs, Alternative Investment Market (AIM).

JEL Classification: G12, G14, G15, G30, G32, G34

Suggested Citation

Campbell, Kevin and Tabner, Isaac T., Bonding, Firm Value and Liquidity: An Analysis of Migrations Between the AIM and the Official List of the London Stock Exchange (June 15, 2011). Available at SSRN: https://ssrn.com/abstract=1608403 or http://dx.doi.org/10.2139/ssrn.1608403

Kevin Campbell

University of Stirling - Stirling Management School ( email )

Stirling Management School
Division of Accounting and Finance
Stirling, Scotland FK9 4LA
United Kingdom
(44) 1786 467280 (Phone)
(44) 1786 467308 (Fax)

Isaac T. Tabner (Contact Author)

University of Stirling - Accounting and Finance Division ( email )

Accounting and Finance Division
University of Stirling
Stirling FK9 4LA, Scotland
United Kingdom
44 (0) 1786 467305 (Phone)
44 (0) 1786 467308 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
263
Abstract Views
1,334
rank
118,822
PlumX Metrics