The Effect of Listing Geography on Stock Prices

Steve H. Hanke and Caleb Hofmann

World Economics, 2025, vol. 26, issue 3, 24-37

Abstract: The paper examines if a stock's exchange listing location (New York vs. Europe) affects its price, challenging the efficient-market hypothesis, amid a growing valuation gap where US equities made up 60.5% of the global market in 2024. It critiques a Financial Times article from 17 March, 2025, which studied 12 European firms adding US listings, finding methodological issues like small sample size, inconsistent event windows (400-4000 days) and focusing on additional listings rather than full relisting. Using a difference-in-difference regression, the authors analyse 15 companies that delisted from Euronext and relisted in New York against 15 control firms, with standardised 53-day event windows, finding a 4.77% stock price drop post-relisting. The results suggest listing geography does not boost valuations, supporting the efficient-market hypothesis with price declines possibly due to investor unfamiliarity or perceived management tactics, though small sample size and confounders warrant cautious interpretation.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:wej:wldecn:953

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