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Post-listing performance and private sector regulation: The experience of London's Alternative Investment Market

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  • Gerakos, Joseph
  • Lang, Mark
  • Maffett, Mark
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    Abstract

    We investigate the experience of companies listing and raising capital on the AIM, which is privately regulated and relies on Nominated Advisors who compete for listings and provide regulatory oversight. AIM firms underperform newly listed firms on traditionally regulated exchanges based on post-listing returns and failure rates, comparable to firms listing on the unregulated US Pink Sheets, and exhibit abnormally high pre-listing accruals and post-listing reversals. “High quality” auditors and Nomads partially mitigate underperformance, suggesting that AIM firms have limited ability to bond through more stringent oversight. Underperformance is particularly pronounced for firms with higher proportions of retail investors.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0165410113000530
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Accounting and Economics.

    Volume (Year): 56 (2013)
    Issue (Month): 2 ()
    Pages: 189-215

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    Handle: RePEc:eee:jaecon:v:56:y:2013:i:2:p:189-215

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    Web page: http://www.elsevier.com/locate/jae

    Related research

    Keywords: Securities regulation; Post-IPO performance; International accounting;

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    Cited by:
    1. Isabel Feito-Ruiz & Clara Cardone-Riportella & Susana Menéndez-Requejo, 2014. "SMEs’ Delisting Decisions on the Alternative Investment Market (AIM): Family Holders and Financial Crisis," Working Papers 14.02, Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration).
    2. Kim, Abby, 2014. "The value of firms' voluntary commitment to improve transparency: The case of special segments on Euronext," Journal of Corporate Finance, Elsevier, vol. 25(C), pages 342-359.

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