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The Effect of Listing Geography on Stock Prices

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  • Steve H. Hanke
  • Caleb Hofmann

Abstract

The paper examines if a stock's exchange listing location (New York vs. Europe) affects its price, challenging the efficient-market hypothesis, amid a growing valuation gap where US equities made up 60.5% of the global market in 2024. It critiques a Financial Times article from 17 March, 2025, which studied 12 European firms adding US listings, finding methodological issues like small sample size, inconsistent event windows (400-4000 days) and focusing on additional listings rather than full relisting. Using a difference-in-difference regression, the authors analyse 15 companies that delisted from Euronext and relisted in New York against 15 control firms, with standardised 53-day event windows, finding a 4.77% stock price drop post-relisting. The results suggest listing geography does not boost valuations, supporting the efficient-market hypothesis with price declines possibly due to investor unfamiliarity or perceived management tactics, though small sample size and confounders warrant cautious interpretation.

Suggested Citation

  • Steve H. Hanke & Caleb Hofmann, 2025. "The Effect of Listing Geography on Stock Prices," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 26(3), pages 24-37, July.
    • Handle: RePEc:wej:wldecn:953
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    File URL: https://www.worldeconomics.com/Journal/Papers/Article.details?ID=953
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