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The Determinants of Performance in Alternative Markets for Small and Medium Enterprises: International Evidence

Author

Listed:
  • Alvin Y. T. Wong

    (Division of Business, Hong Kong Community College, Hung Hom, Kowloon, Hong Kong)

  • Gordon Y. N. Tang

    (Department of Finance and Decision Sciences, Hong Kong Baptist University, Kowloon Tong, Kowloon, Hong Kong)

  • Kam C. Chan

    (Gordon Ford College of Business, Western Kentucky University, Bowling Green, KY 42101, USA)

Abstract

Several stock exchanges have launched alternative markets to target small and medium enterprises. In this research, we examine the determinants of the operating and stock return performance of alternative markets. Our results suggest that turnover and stock returns of alternative markets affect each other. Hence, it is imperative to examine the performances of alternative markets in a simultaneous equation system to mitigate the causality among performance variables. In addition, a good anti-director rights environment and a noncommon law origin country contribute to a higher turnover and additional new listings in an alternative market. A common law origin country, all else the same, contributes to higher alternative market stock returns. A high index of economic freedom negatively correlates with the turnover of an alternative market. The accounting standard and the governance structure of an exchange are not related to the operating and stock return performance in alternative markets. This research contributes to stock market development by focusing on alternative markets.

Suggested Citation

  • Alvin Y. T. Wong & Gordon Y. N. Tang & Kam C. Chan, 2013. "The Determinants of Performance in Alternative Markets for Small and Medium Enterprises: International Evidence," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 1-26.
    • Handle: RePEc:wsi:rpbfmp:v:16:y:2013:i:02:n:s0219091513500094
    DOI: 10.1142/S0219091513500094
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    References listed on IDEAS

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    1. repec:zbw:bofrdp:2002_011 is not listed on IDEAS
    2. Peter Blair Henry & Peter Lombard Lorentzen, 2003. "Domestic Capital Market Reform and Access to Global Finance: Making Markets Work," NBER Working Papers 10064, National Bureau of Economic Research, Inc.
    3. Ladekarl, Jeppe & Zervos, Sara, 2004. "Housekeeping and plumbing - the investability of emerging markets," Policy Research Working Paper Series 3229, The World Bank.
    4. Ladekarl, Jeppe & Zervos, Sara, 2004. "Housekeeping and plumbing: the investability of emerging markets," Emerging Markets Review, Elsevier, vol. 5(3), pages 267-294, September.
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    Cited by:

    1. Frank O. Kwabi & Chandra Thapa & Krishna Paudyal & Suman Neupane, 2020. "Suboptimal international equity portfolio diversification and stock market development," Review of Quantitative Finance and Accounting, Springer, vol. 54(1), pages 389-412, January.
    2. Yaseen S. Alhaj-Yaseen & Kean Wu & Leslie B. Fletcher, 2018. "Accounting Standards and Earnings Quality — Evidence from Registered ADRs," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-40, December.

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    More about this item

    Keywords

    Alternative markets; second board markets; operating performance; listing; G15; G10;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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