The effect of listing switches from a growth market to a main board: An alternative perspective

Jong-Ho Park, Ki Beom Binh and Kyong Shik Eom

Emerging Markets Review, 2016, vol. 29, issue C, 246-273

Abstract: We examine whether firms switching listings from the Korean growth market (KOSDAQ) to the main board (KOSPI) experienced improved trading-related market quality. We focus on market macrostructure and use a difference-in-difference technique with nearest matching. Contrary to previous research and practitioners' opinions, we find that trading-related market quality mostly deteriorated or remained unchanged following the switch, indicating that the specific market macrostructure of a country matters. Listing switches produce a negative externality by weakening KOSDAQ and thereby impairing funding for innovative new firms, suggesting that policymakers should encourage firms whose characteristics fit the standalone growth market to remain listed there.

Keywords: Listing switch; Trading-related market quality; Market macrostructure; Standalone growth market; DID technique with nearest matching (search for similar items in EconPapers)
JEL-codes: C33 G12 G32 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:29:y:2016:i:c:p:246-273

DOI: 10.1016/j.ememar.2016.08.006

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