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Competition of trading volume among markets: Evidence from stocks with multiple cross-listing destinations

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  • Wang, Jing
  • Zhou, Haigang

Abstract

In constructing a comprehensive dataset of firms simultaneously cross-listed on multiple foreign markets between 1990 and 2012, we document the cross-sectional and chronological distribution of the trading volume of global cross-listings and examine the dynamics of competition for order flows among rival host markets. Our sample includes a total of 1118 cross-listings. Among them, 304 equity issues are cross-listed on multiple host markets. We find that host markets are more successful in attracting order flows from rival hosts markets when they have lower trading cost, better legal protection for investors, higher market liquidity, more advanced financial development, English common law origin, and firms with longer listing history. Surprisingly, information-based variables such as information factor and time zone difference have minimal impact on the distribution of order flows.

Suggested Citation

  • Wang, Jing & Zhou, Haigang, 2015. "Competition of trading volume among markets: Evidence from stocks with multiple cross-listing destinations," Journal of Multinational Financial Management, Elsevier, vol. 31(C), pages 23-62.
    • Handle: RePEc:eee:mulfin:v:31:y:2015:i:c:p:23-62
    DOI: 10.1016/j.mulfin.2015.02.002
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    Cited by:

    1. Jonathan A. Batten & Xuan Vinh Vo, 2016. "Bank risk shifting and diversification in an emerging market," Risk Management, Palgrave Macmillan, vol. 18(4), pages 217-235, December.
    2. Ghadhab, Imen & M’rad, Mouna, 2018. "Does US cross-listing come with incremental benefit for already UK cross-listed firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 69(C), pages 188-204.
    3. Ghadhab, Imen & Hellara, Slaheddine, 2016. "Cross-listing and value creation," Journal of Multinational Financial Management, Elsevier, vol. 37, pages 1-11.
    4. Ghadhab, Imen, 2016. "The effect of additional foreign market presence on the trading volume of cross-listed/traded stocks," Journal of Multinational Financial Management, Elsevier, vol. 34(C), pages 18-27.
    5. Jonathan Batten & Xuan Vinh Vo, 2019. "Liquidity And Firm Value In An Emerging Market," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(02), pages 365-376, March.
    6. Imen Ghadhab & Slaheddine Hellara & Abdelkader Derbali, 2018. "Why do firms make an additional cross-listing? An empirical investigation using multiple failure time model," Journal of Asset Management, Palgrave Macmillan, vol. 19(3), pages 191-203, May.

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    More about this item

    Keywords

    Order flow; Cross-border listing; American depository receipts; Delisting; SOX;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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