article

Abdoul Cisse and Patrice Fontaine


Finance Group (2015) : Why Do Companies Switch the Listing Section of Their Common Stocks




Why Do Companies Switch the Listing Section of Their Common Stocks

Abdoul Cisse and Patrice Fontaine




article

Research in International Business and Finance

We analyze the motives and determinants of voluntarily stock exchange section switching on the NYSE Euronext. By strategically deciding trading-section transfer when it is beneficial, managers expect to reduce their liquidity and invisibility costs, cost of capital, or their listing costs. We show that managers decide to change the trading compartment of their common stocks based on various factors including firm's size, liquidity level, debt ratio, and expected growth opportunities. Firms that move voluntarily from a less or non regulated compartments to a more regulated one are likely to have transferred to increase their credibility, improve their stocks’ liquidity, re-balance their leverage, and to finance their growth opportunities. Whereas those that move their common stocks toward a less-regulated compartments do it mainly for costs saving reasons.

To cite this publication :


Abdoul Cisse, Patrice Fontaine: Why Do Companies Switch the Listing Section of Their Common Stocks. Dans: Research in International Business and Finance, on line , 2015.





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