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Demutualization of stock exchanges and its impact on financial performance


  • Faten Ben Slimane

    () (UPE - Université Paris-Est , IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée)

  • Laura Padilla Angulo

    () (Loyola University Andalucía)


The current literature implies that demutualization, or the conversion to for-profit firm, improves financial performance. An econometric analysis focused on the stock exchange industry challenges this status quo by revealing that demutualization by itself does not explain much of the improved exchange financial performance. However, the picture changes when taking into account the interaction effects between demutualization strategy and corporate governance restructuring measures that accompanied demutualization. Results indicate that improved performance is mainly driven by major restructuring in exchanges corporate governance following demutualization involving board of directors, top management teams and incentives structures. Our results shed light on how demutualization strategy brings efficiencies and provide guidance to exchanges considering demutualization. Our results may also apply to firms facing major changes in their business environments.

Suggested Citation

  • Faten Ben Slimane & Laura Padilla Angulo, 2017. "Demutualization of stock exchanges and its impact on financial performance," Post-Print hal-01583850, HAL.
  • Handle: RePEc:hal:journl:hal-01583850
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