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Stock exchange governance and stock liquidity: International evidence

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  • Boussetta, Selma

Abstract

This paper empirically investigates the effects of exchange demutualization on listed firms around the world. In particular, it examines how stock exchange demutualization affects stock liquidity and how the effect varies by exchange operating performance and country development level. We find that stock liquidity improves following exchange demutualization. Specifically, the effect is more evident among exchanges with stronger operating performance which tend to diversify their revenue, and which belong to developed countries. Furthermore, we identify an increase in the market share of exchanges in developed markets in response to exchange ownership conversion, which is mostly driven by domestic order flow. Overall, this paper highlights the importance of the exchange ownership structure strategy in enhancing financial market quality in international markets.

Suggested Citation

  • Boussetta, Selma, 2022. "Stock exchange governance and stock liquidity: International evidence," Journal of Multinational Financial Management, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:mulfin:v:66:y:2022:i:c:s1042444x22000305
    DOI: 10.1016/j.mulfin.2022.100759
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    More about this item

    Keywords

    Stock exchange; Conversion to for-profit firm strategy; Liquidity; Demutualization; Cross-country;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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