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The liquidity cost implications arising from the attraction of regional primary listings: Evidence from West Africa

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  • Hearn, Bruce

Abstract

This study reviews the liquidity costs for firms in outlying regions in primary listing on a centralized stock exchange. Using a unique hand-collected sample comprising all listed firms from across West Africa we find evidence that firms from outlying regions do have higher illiquidity costs although these can be mitigated from improvements in transparency that are associated with increasing familiarity amongst investment community of central exchange. This evidence has implications regarding the integration of stock exchanges in developing regions where this is likely to result in a greater concentration of liquidity mitigating intended optimal redistribution of capital and resources.

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  • Hearn, Bruce, 2014. "The liquidity cost implications arising from the attraction of regional primary listings: Evidence from West Africa," Research in International Business and Finance, Elsevier, vol. 30(C), pages 91-110.
    • Handle: RePEc:eee:riibaf:v:30:y:2014:i:c:p:91-110
    DOI: 10.1016/j.ribaf.2013.06.002
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    Cited by:

    1. Acquaah, Moses, 2015. "Determinants of corporate listings on stock markets in Sub-Saharan Africa: Evidence from Ghana," Emerging Markets Review, Elsevier, vol. 22(C), pages 154-175.
    2. Boako, Gideon & Alagidede, Paul, 2018. "African stock markets in the midst of the global financial crisis: Recoupling or decoupling?," Research in International Business and Finance, Elsevier, vol. 46(C), pages 166-180.

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    More about this item

    Keywords

    Liquidity; Liquidity determinants; Emerging financial markets; West Africa;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative

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