Investor Recognition, Liquidity, and Exchange Listings in the Reformed Markets

22 Pages Posted: 17 Sep 2006

See all articles by Jang-Chul Kim

Jang-Chul Kim

Northern Kentucky University - Haile/US Bank College of Business

Pankaj K. Jain

University of Memphis - Fogelman College of Business and Economics

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Abstract

We examine multiple facets of firms' decisions to list on the NYSE. Although the average Nasdaq spreads are now comparable to the average NYSE spreads, we find that firms continue to switch from Nasdaq to the NYSE, and that they experience positive cumulative abnormal returns on listing. Using a simultaneous system of equations approach, we establish that enhanced investor recognition mainly explains this phenomenon. A logistic regression suggests that corporate listing choice is consistent with these findings, since eligible unlisted firms already have high volumes and recognition and might not benefit as much as do firms that actually switch.

Suggested Citation

Kim, Jang-Chul and Jain, Pankaj K., Investor Recognition, Liquidity, and Exchange Listings in the Reformed Markets. Financial Management, Vol. 35, No. 2, Summer 2006, Available at SSRN: https://ssrn.com/abstract=929703

Jang-Chul Kim (Contact Author)

Northern Kentucky University - Haile/US Bank College of Business ( email )

Dept of Accounting, Finance, and Business Law
Highland Heights, KY 41099
United States
859-572-1486 (Phone)

Pankaj K. Jain

University of Memphis - Fogelman College of Business and Economics ( email )

Memphis, TN 38152
United States

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