Exchange trading rules, governance, and trading location of cross-listed stocks

Taylor & Francis (Routledge)
Publication Type:
Journal Article
The European Journal of Finance, 2018, 24 (16), pp. 1453 - 1484
Issue Date:
Full metadata record
Files in This Item:
This paper shows stock exchange trading rules are of central importance for the trading location of cross-listed stocks. We also consider various measures of sovereign governance and shareholder rights across countries to assess the complementary effects of other legal and institutional drivers of trading activity. The data indicate that the proportion of trades that occurs on an exchange increases at a decreasing rate with the strength of stock exchange trading rules. The effectiveness of stock exchange rules increases with the strength of regulatory institutions in the country hosting the stock exchange. Furthermore, corroborating with our full sample findings, difference-in-difference tests indicate the promulgation of MIFID, which strengthened trading rules within the European Union (EU), has increased the amount of trade in the EU.
Please use this identifier to cite or link to this item: