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The effect of additional foreign market presence on the trading volume of cross-listed/traded stocks

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  • Ghadhab, Imen

Abstract

This paper aims to address an unanswered question about the effect of additional foreign market presence on the trading volume of cross-listed/traded firms. Using a unique and comprehensive sample of 235 firms with 788 foreign listings/tradings over the period 1980–2013, we find that compared with the decrease in trading volume after the first cross-listing, additional foreign listing/trading results in more shares traded on the stock. Results also show that the effect of additional cross-trading is more important than additional cross-listing for high orders of foreign presences. We find that the increase in trading volume is negatively related to trading costs and positively to arbitrage opportunities. We also find that proximity preference and firm size play significant effects that depend on the order of cross-listing/trading.

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  • Ghadhab, Imen, 2016. "The effect of additional foreign market presence on the trading volume of cross-listed/traded stocks," Journal of Multinational Financial Management, Elsevier, vol. 34(C), pages 18-27.
    • Handle: RePEc:eee:mulfin:v:34:y:2016:i:c:p:18-27
    DOI: 10.1016/j.mulfin.2015.12.002
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    Cited by:

    1. Ghadhab, Imen & M’rad, Mouna, 2018. "Does US cross-listing come with incremental benefit for already UK cross-listed firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 69(C), pages 188-204.
    2. Awadh Saeed Bin-Dohry & Hanita Kadir Shahar & Sharmilawati Sabki, 2023. "Destination choice of the dual listing decision: The case ASEAN-5 firms," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(2), pages 2233773-223, June.
    3. Ghadhab, Imen & Hellara, Slaheddine, 2016. "Cross-listing and value creation," Journal of Multinational Financial Management, Elsevier, vol. 37, pages 1-11.
    4. Yang, Ann Shawing & Carandang, Craig Alan Uyan, 2017. "Exploring the location and price differentials of cross-listed firms for arbitrage opportunities," Finance Research Letters, Elsevier, vol. 21(C), pages 85-91.
    5. Imen Ghadhab, 2021. "Cross-listing and crisis," Journal of Asset Management, Palgrave Macmillan, vol. 22(7), pages 539-558, December.
    6. Awadh Saeed Bin-Dohry & Hanita Kadir Shahar & Sharmilawati Sabki & David McMillan, 2021. "The determinants of dual listing decision of firms from ASEAN-5," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1917105-191, January.
    7. Naufa, Ahmad Maulin & Lantara, I Wayan Nuka & Lau, Wee-Yeap, 2019. "The impact of foreign ownership on return volatility, volume, and stock risks: Evidence from ASEAN countries," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 221-235.

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    More about this item

    Keywords

    Cross-listing; Cross-trading; Trading volume;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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