Title: Price and Liquidity Effects of Switching Exchange Listings
Authors: Liao, Tsai-Ling
Yu, Min-Teh
資訊管理與財務金融系 註:原資管所+財金所
Department of Information Management and Finance
Keywords: exchange listing;liquidity effect;price effect
Issue Date: 1-Jul-2013
Abstract: By examining the price and liquidity effects around announcements of switching exchanges by firms within structurally similar markets in Taiwan, the authors uncover that while switching firms experience only a trivial effect around the application announcement days, there is a pronounced price rise during the prelisting period. Subsequently, they find only a partial reversal of this prelisting increase over the listing days and the postlisting period. However, they observe that stock liquidity improves following the application announcements, peaks around the listing days, and remains at high levels after listing. Further results suggest that firms' announcements that they are switching exchanges are not followed by improved earnings relative to performance-matched control firms. Collectively, these results reveal that transfer stocks in Taiwan convey information about permanent improvements in liquidity rather than better earnings prospects, which is consistent with the stock marketability implications of managerial exchange-switching decisions.
URI: http://dx.doi.org/10.2753/REE1540-496X4904S302
ISSN: 1540-496X
DOI: 10.2753/REE1540-496X4904S302
Volume: 49
Begin Page: 20
End Page: 34
Appears in Collections:Articles