On the Fortunes of Stock Exchanges and Their Reversals: Evidence from Foreign Listings

54 Pages Posted: 13 Sep 2013

See all articles by Nuno Fernandes

Nuno Fernandes

Catolica Lisbon School of Business and Economics; IMD International

Mariassunta Giannetti

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swedish House of Finance

Multiple version iconThere are 4 versions of this paper

Date Written: August 23, 2013

Abstract

Using a sample that provides unprecedented detail on foreign listings, new listings, and delistings for 29 exchanges in 24 countries starting from the early 1980s, we document a growing tendency of listings to concentrate in the U.S. and the U.K., and large changes in all exchanges’ ability to attract foreign companies. We highlight the following determinants of these patterns. First, during the sample period, investor protection improved in many countries. As investor protection improves in the country of origin, firms become less likely to list in countries with weak investor protection, but more likely to list in countries with strong investor protection, especially in the U.K. and the U.S. Second, we show that foreign listings are related to the exchange’s market valuation in the same way that domestic equity issues are and that firms that are more difficult to evaluate are more inclined to list in foreign exchanges with high valuations.

Keywords: Cross-listings, market timing, investor protection, SOX

JEL Classification: G15, G38, M41, M45, F40

Suggested Citation

Fernandes, Nuno and Giannetti, Mariassunta, On the Fortunes of Stock Exchanges and Their Reversals: Evidence from Foreign Listings (August 23, 2013). ECB Working Paper No. 1585. Available at SSRN: https://ssrn.com/abstract=2315057

Nuno Fernandes (Contact Author)

Catolica Lisbon School of Business and Economics ( email )

Palma de Cima
Lisbon, 1649-023
Portugal

IMD International ( email )

Ch. de Bellerive 23
P.O. Box 915
CH-1001 Lausanne
Switzerland

Mariassunta Giannetti

Stockholm School of Economics ( email )

P.O. Box 6501
Sveavagen 65
SE-113 83 Stockholm
Sweden
+46 8 736 9607 (Phone)
+46 8 312 327 (Fax)

HOME PAGE: http://sites.google.com/site/mariassuntagiannetti/Home

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

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