Domestic liquidity and cross-listing in the United States

Henk Berkman and Nhut H. Nguyen

Journal of Banking & Finance, 2010, vol. 34, issue 6, 1139-1151

Abstract: This study examines changes in domestic liquidity after cross-listing in the United States. Our liquidity measures are based on intraday data from domestic markets for a large sample of firms that cross-list in the United States and for a matched sample of firms that do not cross-list. We find that unadjusted liquidity significantly improves after cross-listing. However, after controlling for contemporaneous changes in liquidity for a matched sample of firms that do not cross-list, there is no evidence of improvements in domestic liquidity due to cross-listing. Our results offer no support for the bonding hypothesis, or for the hypothesis that cross-listing improves domestic liquidity because of increased intermarket competition and additional order flow.

Keywords: Cross-listing; Liquidity; Bid-ask; spreads; Price; impact; Probability; of; informed; trading; Bonding; Order; flow; migration; Asymmetric; information; Investor; protection (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:34:y:2010:i:6:p:1139-1151

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