Competition for Listings
AbstractWe develop a model in which stock exchanges compete for IPO listings. They choose the listing fees paid by entrepreneurs wishing to go public and control the trading costs incurred by investors. All entrepreneurs prefer lower trading costs but differ in how much they value a decrease in trading costs. Hence, in equilibrium, competing exchanges can obtain positive expected profits by choosing different trading costs and different listing fees. The model has testable implications on the cross-sectional characteristics of IPOs on different-quality exchanges and the relationship between the level of trading costs and listing fees.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 35 (2004)
Issue (Month): 2 (Summer)
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Other versions of this item:
- Thierry Foucault & Christine a Parlour, . "Competition for Listings," GSIA Working Papers 2000-E11, Carnegie Mellon University, Tepper School of Business.
- FOUCAULT, Thierry & PARLOUR, Christine A., 1999. "Competition for Listings," Les Cahiers de Recherche 666, HEC Paris.
- Foucault, Thierry & Parlour, Christine A, 1999. "Competition for Listings," CEPR Discussion Papers 2222, C.E.P.R. Discussion Papers.
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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