Trading Costs and Exchange Delisting: The Case of Firms that Voluntarily Move from the American Stock Exchange to the Nasdaq





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    • Clyde is presently with the University of Michigan. Schultz and Zaman are with National Economic Research Associates, The Ohio State University, and University of Northern Iowa. We thank Sarah Dickerson and Erika Meyers for research assistance and Douglas Radtke for help in identifying announcement dates and motivations for delisting. We thank Joe Burns, David Butz, William Christie, Bill Clyde, Margaret Forster, Jeffrey Harris, Sara Moeller, Timothy Opler, René Stulz, Matt Wright, the American Stock Exchange, an anonymous referee, and seminar participants at the U.S. Department of Justice for helpful comments. Paul Schultz gratefully acknowledges financial support from the Dice Center for Financial Research at Ohio State University. Paul Schultz has been retained as a consultant by plaintiffs in the Nasdaq Market Makers Antitrust Litigation. However, this study was not funded in whole or in part by them. The opinions expressed in this article and any remaining errors are our own.


We examine 47 stocks that voluntarily left the American Stock Exchange from 1992 through 1995 and listed on the Nasdaq. We find that both effective and quoted spreads increase by about 100 percent after listing on the Nasdaq. These spread changes are consistent across stocks. In contrast, excess returns are positive when firms announce a switch from The American Stock Exchange to the Nasdaq. We are unable to explain this apparent contradiction.