Article1990

Liquidity and Stock Exchange Listing

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Abstract

Abstract This study examines the pattern of stock price behavior for a sample of 71 firms that moved from NASDAQ and NASDAQ/NMS to the American Stock Exchange (AMEX) between 1982 and 1987. The study tests the liquidity gains hypothesis, which states that investors expect liquidity gains for the less liquid over‐the‐counter stocks but not for their more liquid counterparts after their listing on the AMEX. The results support the hypothesis by showing a significant difference between the two groups of stocks on the day the AMEX announced approval of the listing. Thus, companies with low liquidity are the largest beneficiaries of listing. The evidence provides little support for the anomalous negative pattern of returns during the post‐listing period reported in previous studies.

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1985Using daily stock returns 1986Asset pricing and the bid-ask spread 1980Measuring security price performance 1988Liquidity and Asset Prices: Financial Management Implications 1985Liquidity, exchange listing, and common stock performance 1986Stock Exchange Listings, Firm Value, and Security Market Efficiency: The Impact of NASDAQ 1987Liquidity, Stock Markets, and Market Makers 1987The Puzzle in Post-Listing Common Stock Returns

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1996A survey of evidence on domestic and international stock exchange listings with implications for markets and managers 2023Forward looking statement, investor sentiment and stock liquidity 2008Does switching from NASDAQ to the NYSE affect investment–cash flow sensitivity?

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