http://dx.doi.org/10.1006/jfin.1998.0237

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Title

When does internationalization enhance the development of domestic stock markets?

Authors

Authors

K. Hargis;P. Ramanlal

Comments

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Abbreviated Journal Title

J. Financ. Intermed.

Keywords

LIQUIDITY; CONSOLIDATION; FRAGMENTATION; TRANSPARENCY; INVESTMENT; SECURITY; RISK; Business, Finance

Abstract

We develop a model to examine the impact of international cross-listing on domestic market liquidity and trading volume to determine when domestic market development is likely to follow. Greater information transparency between markets increases domestic market liquidity and volume, resulting in market development. Conversely, post-listing order flow migration away from the domestic market reduces its liquidity and volume, resulting in retardation. The net impact is positive and greater when market professionals acquire rather than reveal information, for smaller previously restricted markets, and for cross-listings in larger more transparent markets that have a greater potential to expand the shareholder base. Journal of Economic Literature Classification Numbers: D44, D82, F36, G15. (C) 1998 Academic Press.

Journal Title

Journal of Financial Intermediation

Volume

7

Issue/Number

3

Publication Date

1-1-1998

Document Type

Article

Language

English

First Page

263

Last Page

292

WOS Identifier

WOS:000077360900003

ISSN

1042-9573

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