Does One Size Fit All? The Consequences of Switching Markets with Different Regulatory Standards.
As the regulation of public companies has progressively tightened in recent years, many companies have chosen to switch to stock exchanges with lower regulatory requirements. We analyse the consequences of switching for smaller quoted companies, using the unusual regulatory environment in London, wh...
| Main Authors: | , |
|---|---|
| Format: | Working paper |
| Language: | English |
| Published: |
Oxford Finance
2009
|
| _version_ | 1826260507215003648 |
|---|---|
| author | Jenkinson, T Ramadorai, T |
| author_facet | Jenkinson, T Ramadorai, T |
| author_sort | Jenkinson, T |
| collection | OXFORD |
| description | As the regulation of public companies has progressively tightened in recent years, many companies have chosen to switch to stock exchanges with lower regulatory requirements. We analyse the consequences of switching for smaller quoted companies, using the unusual regulatory environment in London, which has two markets with different regulatory regimes but the same trading technology. Firms that switch to lighter regulation experience negative announcement returns of approximately 4%. However these initial price reactions are reversed after the actual switch. We also find an intriguing longer-term upward drift in stock returns, which we relate to improved operating performance. |
| first_indexed | 2024-03-06T19:06:44Z |
| format | Working paper |
| id | oxford-uuid:1566c433-52d5-4a3e-8c35-e7829c25ebf8 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T19:06:44Z |
| publishDate | 2009 |
| publisher | Oxford Finance |
| record_format | dspace |
| spelling | oxford-uuid:1566c433-52d5-4a3e-8c35-e7829c25ebf82022-03-26T10:25:15ZDoes One Size Fit All? The Consequences of Switching Markets with Different Regulatory Standards.Working paperhttp://purl.org/coar/resource_type/c_8042uuid:1566c433-52d5-4a3e-8c35-e7829c25ebf8EnglishDepartment of Economics - ePrintsOxford Finance2009Jenkinson, TRamadorai, TAs the regulation of public companies has progressively tightened in recent years, many companies have chosen to switch to stock exchanges with lower regulatory requirements. We analyse the consequences of switching for smaller quoted companies, using the unusual regulatory environment in London, which has two markets with different regulatory regimes but the same trading technology. Firms that switch to lighter regulation experience negative announcement returns of approximately 4%. However these initial price reactions are reversed after the actual switch. We also find an intriguing longer-term upward drift in stock returns, which we relate to improved operating performance. |
| spellingShingle | Jenkinson, T Ramadorai, T Does One Size Fit All? The Consequences of Switching Markets with Different Regulatory Standards. |
| title | Does One Size Fit All? The Consequences of Switching Markets
with Different Regulatory Standards. |
| title_full | Does One Size Fit All? The Consequences of Switching Markets
with Different Regulatory Standards. |
| title_fullStr | Does One Size Fit All? The Consequences of Switching Markets
with Different Regulatory Standards. |
| title_full_unstemmed | Does One Size Fit All? The Consequences of Switching Markets
with Different Regulatory Standards. |
| title_short | Does One Size Fit All? The Consequences of Switching Markets
with Different Regulatory Standards. |
| title_sort | does one size fit all the consequences of switching markets with different regulatory standards |
| work_keys_str_mv | AT jenkinsont doesonesizefitalltheconsequencesofswitchingmarketswithdifferentregulatorystandards AT ramadorait doesonesizefitalltheconsequencesofswitchingmarketswithdifferentregulatorystandards |