Competition Of Trading Volume Among Markets: Evidence From Stocks With Multiple Cross-Listing Destinations

Jing Wang; Haigang Zhou

doi:10.1016/j.mulfin.2015.02.002

Competition Of Trading Volume Among Markets: Evidence From Stocks With Multiple Cross-Listing Destinations

Jing Wang
, Haigang Zhou

Cleveland State University

Research output: Contribution to journal › Article › peer-review

Abstract

In constructing a comprehensive dataset of firms simultaneously cross-listed on multiple foreign markets between 1990 and 2012, we document the cross-sectional and chronological distribution of the trading volume of global cross-listings and examine the dynamics of competition for order flows among rival host markets. Our sample includes a total of 1118 cross-listings. Among them, 304 equity issues are cross-listed on multiple host markets. We find that host markets are more successful in attracting order flows from rival hosts markets when they have lower trading cost, better legal protection for investors, higher market liquidity, more advanced financial development, English common law origin, and firms with longer listing history. Surprisingly, information-based variables such as information factor and time zone difference have minimal impact on the distribution of order flows.

Original language	American English
Journal	Journal of Multinational Financial Management
Volume	31
DOIs	https://doi.org/10.1016/j.mulfin.2015.02.002
State	Published - Apr 1 2015

Keywords

order flow; cross-border listing; american depository receipts; delisting; SOX; Sarbanes-Oxley Act

Disciplines

Finance and Financial Management
Portfolio and Security Analysis

Access to Document

10.1016/j.mulfin.2015.02.002License: CC BY

Cite this

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title = "Competition Of Trading Volume Among Markets: Evidence From Stocks With Multiple Cross-Listing Destinations",

abstract = " In constructing a comprehensive dataset of firms simultaneously cross-listed on multiple foreign markets between 1990 and 2012, we document the cross-sectional and chronological distribution of the trading volume of global cross-listings and examine the dynamics of competition for order flows among rival host markets. Our sample includes a total of 1118 cross-listings. Among them, 304 equity issues are cross-listed on multiple host markets. We find that host markets are more successful in attracting order flows from rival hosts markets when they have lower trading cost, better legal protection for investors, higher market liquidity, more advanced financial development, English common law origin, and firms with longer listing history. Surprisingly, information-based variables such as information factor and time zone difference have minimal impact on the distribution of order flows.",

keywords = "order flow; cross-border listing; american depository receipts; delisting; SOX; Sarbanes-Oxley Act",

author = "Jing Wang and Haigang Zhou",

note = "Wang, J. \& Zhou, H. (2015). Competition of trading volume among markets: Evidence from stock with multiple cross-listing destinations. Journal of Multinational Financial Management, 31, 23-62. doi: 10.1016/j.mulfin.2015.02.002",

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AU - Wang, Jing

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PY - 2015/4/1

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N2 - In constructing a comprehensive dataset of firms simultaneously cross-listed on multiple foreign markets between 1990 and 2012, we document the cross-sectional and chronological distribution of the trading volume of global cross-listings and examine the dynamics of competition for order flows among rival host markets. Our sample includes a total of 1118 cross-listings. Among them, 304 equity issues are cross-listed on multiple host markets. We find that host markets are more successful in attracting order flows from rival hosts markets when they have lower trading cost, better legal protection for investors, higher market liquidity, more advanced financial development, English common law origin, and firms with longer listing history. Surprisingly, information-based variables such as information factor and time zone difference have minimal impact on the distribution of order flows.

AB - In constructing a comprehensive dataset of firms simultaneously cross-listed on multiple foreign markets between 1990 and 2012, we document the cross-sectional and chronological distribution of the trading volume of global cross-listings and examine the dynamics of competition for order flows among rival host markets. Our sample includes a total of 1118 cross-listings. Among them, 304 equity issues are cross-listed on multiple host markets. We find that host markets are more successful in attracting order flows from rival hosts markets when they have lower trading cost, better legal protection for investors, higher market liquidity, more advanced financial development, English common law origin, and firms with longer listing history. Surprisingly, information-based variables such as information factor and time zone difference have minimal impact on the distribution of order flows.

KW - order flow; cross-border listing; american depository receipts; delisting; SOX; Sarbanes-Oxley Act

UR - https://engagedscholarship.csuohio.edu/bus_facpub/200

U2 - 10.1016/j.mulfin.2015.02.002

DO - 10.1016/j.mulfin.2015.02.002

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JO - Journal of Multinational Financial Management

JF - Journal of Multinational Financial Management

ER -

Competition Of Trading Volume Among Markets: Evidence From Stocks With Multiple Cross-Listing Destinations

Abstract

Keywords

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