Delistings of secondary listings: price and volume effects
Despite their growing importance in recent years, delistings of secondary listings have received very little attention. This article investigates whether a delisting is accompanied by any price or volume effects on the company’s primary exchange. We apply a standard event study methodology to analyze these effects. The total sample consists of 255 companies that either delisted from the SIX Swiss Exchange, the Sponsored Segment of the SIX, Deutsche Börse, or the Tokyo Stock Exchange. The results show no significant price effects, either around the announcement or around the effective delisting. Furthermore, the results vary considerably between subsamples. Prices tend to decline around announcement; however, the effect is not permanent. The effective delisting is preceded by declining prices, whereas the event itself has no influence. Overall, this initial decline appears to be permanent. In general, volumes seem to rise around the announcement as well as around the date of the delisting. Copyright Swiss Society for Financial Market Research 2010
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lowengrub, Paul & Melvin, Michael, 2002. "Before and after international cross-listing: an intraday examination of volume and volatility," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 12(2), pages 139-155, April.
- Ajinkya, Bipin B. & Jain, Prem C., 1989. "The behavior of daily stock market trading volume," Journal of Accounting and Economics, Elsevier, vol. 11(4), pages 331-359, November.
- Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
- Corrado, Charles J., 1989. "A nonparametric test for abnormal security-price performance in event studies," Journal of Financial Economics, Elsevier, vol. 23(2), pages 385-395, August.
- Nilanjan Basu, 2010. "Trends in corporate diversification," Financial Markets and Portfolio Management, Springer, vol. 24(1), pages 87-102, March.
- Michael R. King & Usha R. Mittoo, 2007. "What Companies Need to Know About International Cross-Listing," Journal of Applied Corporate Finance, Morgan Stanley, vol. 19(4), pages 60-74.
When requesting a correction, please mention this item's handle: RePEc:kap:fmktpm:v:24:y:2010:i:4:p:395-418. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.