Competition and cooperation among exchanges: A theory of cross-listing and endogenous listing standards

• 成果类型: Article
• 署名作者: Chemmanur, Thomas J.; Fulghieri, Paolo
• 署名单位: Boston College; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2005.06.008
• 发表日期: 2006
• 页码: 455-489
• 关键词: cross listing; listing standards; exchange competition; takeovers of exchanges

摘要

We analyze firms' choice of exchange to list equity and exchanges' choice of listing standards when insiders have private information about firm value, but outsiders can produce (noisy) information at a cost. Exchanges are populated by two kinds of investors, whose numbers vary across exchanges: sophisticated (low information production cost) investors and ordinary (high-cost) investors. While firms are short-lived, exchanges are long-lived, value-maximizing agents whose listing and disclosure standards evolve over time. The listing standards chosen by exchanges affect their reputation, since outsiders can partially infer the rigor of these standards from the post-listing performance of firms. We show that, while exchanges use their listing standards as a tool in competing for listings with other exchanges, this will not necessarily lead to a race to the bottom in listing standards. Further, a merger between two exchanges may result in a higher listing standard for the combined exchange relative to that of either of the merging exchanges. We develop several other implications for firms' listing choices and resulting valuation effects, the impact of competition and co-operation among exchanges on listing standards, and the optimal regulation of exchanges. (c) 2006 Elsevier B.V. All rights reserved.