The Impact of Exchange Listing on Corporate Governance: Evidence from Direct Listings
58 Pages Posted: 12 Jun 2018 Last revised: 27 Sep 2018
Date Written: September 14, 2018
Spotify Technology disrupted the traditional IPO marketplace by avoiding investment bankers and directly listing its existing shares on the NYSE. We use similar transactions by public non-listed REITs to study direct exchange listing for companies with existing publicly owned, but non-listed shares in a setting where the effects of listing are distinct from the confounding effect of capital raising inherent in traditional IPOs. Our evidence shows corporate governance improves during and following listing and suggests that incentives for rent extraction by management are a prime motivation when choosing not to list.
Keywords: Direct Listing, Exchange Listing, Corporate Governance, Spotify, REITs
JEL Classification: G23, G32, G34
Suggested Citation: Suggested Citation