The effect of “reverse” dual-listing on stock liquidity

Research output: Contribution to journalArticlepeer-review

Abstract

Liquidity risk significantly affects trading in financial markets, and thus it has been vastly researched and documented in the academic literature. There are also many dozens of prior studies on cross-traded stocks. These two issues are the focus of this paper, in a rather unique setup, in which Israeli firms, initially issuing their stocks in a U.S. exchange, are encouraged by the Israeli regulator to cross-list their stocks in the Tel Aviv Stock Exchange – their “domestic” market. This is a “reverse” move compared to most other dual-listings in which firms seek trading in foreign markets after initially issuing equity in their domestic market. Using liquidity measures, mainly liquidity VaR and ILLIQ, we find on average a mixed effect in the market, predominantly of increased liquidity.
Original languageEnglish GB
Pages (from-to)70-79
JournalInternational Research Journal of Finance and Economics
Volume131
StatePublished - 2015

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