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Listing Switches from NASDAQ to the NYSE or AMEX: Is New Stock Issuance a Motive?

In: Advances In Quantitative Analysis Of Finance And Accounting New Series

Author

Listed:
  • Asli Ascioglu

    (Assistant Professor of Finance, Bryant College, 1150 Douglas Pike, Smithfield, RI 02917-1284, USA)

  • Thomas H. McInish

    (Professor and Wunderlich Chair of Finance, The University of Memphis, Memphis, TN 38152, USA)

Abstract

We investigate whether firms that switch their listing from NASDAQ to either the NYSE or AMEX earn excess returns and increase shares outstanding. We find statistically positive cumulative excess returns around the switch day, but the cumulative excess returns turn negative two weeks after the switch and remain negative through the end of the study period at day +40. The number of sample firms that increase their shares outstanding at the time of the switch is not significantly larger than for a control group. We also find no evidence of significantly higher excess returns gained by firms that issue securities than for firms that do not issue securities. Hence, we conclude that our results do not support the view that firms increase their shares outstanding to take advantage of increased share value at the time of the switch.

Suggested Citation

  • Asli Ascioglu & Thomas H. McInish, 2005. "Listing Switches from NASDAQ to the NYSE or AMEX: Is New Stock Issuance a Motive?," World Scientific Book Chapters, in: Cheng-Few Lee (ed.), Advances In Quantitative Analysis Of Finance And Accounting New Series, chapter 10, pages 171-186, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812701213_0010
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    Keywords

    Derivatives Pricing; Path Analysis; Spillover; Effective Interest Rate; Higher Moments; NASDAQ; Covered Call Investing; Index Securities; Hedging; Asset Pricing; CFA Designation;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • G19 - Financial Economics - - General Financial Markets - - - Other
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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