Regulation takes a back seat to business concerns: international evidence from stock exchange demutualization

• 成果类型: Article
• 署名作者: Huang, Shawn X.; Kim, Min; Rykaczewski, Maria; Vulcheva, Maria
• 署名单位: Arizona State University; Arizona State University-Tempe; Sogang University; State University System of Florida; Florida International University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-024-09863-3
• 发表日期: 2025
• 页码: 1916-1967
• 关键词: earnings management; cross-listings; FIRMS; disclosure; MARKETS; performance; COMPETITION; incentives; governance; liquidity

摘要

In recent decades, increasing globalization and rapid technological development have caused many stock exchanges to change their ownership structure from mutually owned (broker/dealer-owned) to demutualized (for-profit, shareholder-owned). This study investigates whether increased for-profit focus weakens exchanges' monitoring incentives. Using multiple financial reporting quality metrics to capture monitoring efforts, we find that monitoring of listed firms declines post demutualization. Additional tests confirm that our findings are attributable to changes in oversight of the firms listed on demutualized exchanges (either by the exchange or the local regulator). These findings only hold among weak regulatory regimes, emphasizing the significance of strong, independent, country-level regulatory organizations in monitoring stock exchanges.