مقاله سال ۲۰۱۶

 مجله مدیریت مالی چند ملیتی – Journal of Multinational Financial Management

Since the 1980, a substantial number of companies choose to cross-list their shares in overseas regulated markets. Companies’ shares may also be traded in unregulated markets. Hence, after cross-listing/trading, companies’ shares become more accessible to investors and greater trading volume can occur1. The aim of this paper is to address this question and examine the effect of foreign presence (or cross-listing/trading) on trading volume of cross-listed/traded stocks.

Earlier literature examines the consequences of cross-listing on stock’s liquidity in general and on trading volume in particular and finds mixed results. Some studies show an increased trading volume after cross-listing (Smith and Sofianos, 1997; Foerster and Karolyi, 1998; Hamet, 2002; Abdallah et al., 2011), and others conclude that international cross-listing have no impact or even a deterioration of stock liquidity (Silva and Chávez, 2008; Berkman and Nguyen, 2010).

Despite the fact that a considerable number of firms are cross-listed and/or traded in multiple foreign markets, earlier literature focus essentially on dual-listed stocks (or stock with home and only one foreign listing market). In addition, little attention was given in the literature for cross-traded stock. Potentially, cross-trading on a foreign market makes a company’s shares available to a significant numbers of traders and could be a substitute for cross-listing with no additional costs related essentially to mandatory listing and disclosure requirements. However, comparison between the effects of cross-listing and cross-trading remains an open question that needs to be investigated.