*Pankaj K. Jain is the Suzanne Downs Palmer Professor and Assistant Professor of Finance at the University of Memphis in Memphis, TN. Jang-Chual kim is an Assistant Professor of Finance at the North Dakota State University in Fargo, ND.
Investor Recognition, Liquidity, and Exchange Listings in the Reformed Markets
Version of Record online: 27 OCT 2008
Volume 35, Issue 2, pages 21–42, June 2006
How to Cite
Jain, P. K. and Kim, J.-C. (2006), Investor Recognition, Liquidity, and Exchange Listings in the Reformed Markets. Financial Management, 35: 21–42. doi: 10.1111/j.1755-053X.2006.tb00140.x
- Issue online: 27 OCT 2008
- Version of Record online: 27 OCT 2008
We examine multiple facets of firms' descisions 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 ststem of equations approach, we establish that enhanced investor recognition mainly explains this phenomenon. A logistic regression suggesrts 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.