Title

When Does Internationalization Enhance the Development of Domestic Stock Markets?

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 LiteratureClassification Numbers: D44, D82, F36, G15. © 1998 Academic Press.

Publication Date

7-1-1998

Publication Title

Journal of Financial Intermediation

Volume

7

Issue

3

Number of Pages

263-292

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1006/jfin.1998.0237

Socpus ID

0006215408 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/0006215408

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