The effects of exchange listing on market quality: Evidence from over‐the‐counter uplistings

Ryan Davis, Todd Griffith, Brian Roseman and Serhat Yildiz

The Financial Review, 2021, vol. 56, issue 4, 645-669

Abstract: We study the effects of exchange uplisting from the modern over‐the‐counter (OTC) markets on liquidity, volatility, and price discovery. In a series of difference‐in‐differences tests, we find that for a sample of OTC treatment firms that uplist to the NASDAQ, New York Stock Exchange (NYSE), or NYSE MKT, relative to matched control firms, liquidity improves dramatically after listing. We also show that price discovery improves for treatment firms vis‐à‐vis control firms after listing. The results contribute to the discussion surrounding the facilitation of capital formation and offer important insights to investors, managers, and exchange officials.

Date: 2021
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