The effect of listing switches from a growth market to a main board: An alternative perspective

Park, Jong-Ho; Binh, Ki Beom; Eom, Kyong Shik

doi:10.1016/j.ememar.2016.08.006

Cited by 12 publications

(6 citation statements)

References 30 publications

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“…Some previous studies find that firms earn insignificant abnormal CAR after moving the trading venues Edelman, 1990, 1991;Kadlec and McConnell, 1994;Bacmann et al, 2002;Liao and Yu, 2013;Park et al, 2016) while others report negative post-switching CAR on firms (Sanger and McConnell, 1986;McConnell and Sanger, 1987;Baker and Edelman, 1992;Dharan and Ikenberry, 1995;Lamba and Ariff, 1997). More recent evidence shows that the post-switching performance depends on the regulatory standards of the markets.…”

Section: Post-switching Stock Price Performancementioning

confidence: 97%

“…Carvalho and Pennacchi (2012), Jenkinson and Ramadorai (2013), Campbell and Tabner (2014), and Kim (2014) find that firms moving to more regulated markets experience positive announcement returns and an increase in trading volume. Interestingly, Park et al (2016) find that Korean firms experience deterioration in trading-related market quality (increase in bidask spread and decrease in volume) following the switch from KOSDAQ to the more regulated KOSPI.…”

Section: Introductionmentioning

confidence: 99%

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Does switching trading venues create value? Evidence from Hong Kong

Kwok

2020

JABES

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PurposeThe purpose of this paper is to study whether switching trading venues create value in the Hong Kong stock market.Design/methodology/approachBy using an event study, the paper investigates the abnormal returns (AR) earned by firms in the Growth Enterprise Market (GEM) relating to switching to the Main Board (MB). Two measures, turnover of the stock and Amihud’s (2002) illiquidity ratio, are used to examine the liquidity effects.FindingsThe switch is accompanied by a long-term increase in stock price for low liquidity firms only. High liquidity firms underperform with persistent negative excess returns after switching, while the transient negative excess returns in low liquidity firms reverse gradually. The results further show a significant increase in trading activity for low liquidity firms following the switch, while there is a significant decline in both trading activity and liquidity in firms with high liquidity. The overall results suggest that moving from GEM to the MB is beneficial to low liquidity firms but detrimental to high liquidity firms.Originality/valueThis study is the first to investigate whether moving from GEM to the MB creates value in the Hong Kong stock market.

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Section: Post-switching Stock Price Performancementioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

Does switching trading venues create value? Evidence from Hong Kong

Kwok

2020

JABES

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“…The KOSPI's listing requirements are much stricter than the KOSDAQ's requirements. Park, Binh, and Eom (2016) show that moving from the KOSDAQ to the KOSPI generates no meaningful improvements with respect to stock price, volatility, and stock trade quality. De Carvalho and Pennacchi (2011) find that moving from the Brazilian stock market to the U.S. stock market, which is stringently regulated to protect shareholders, alters corporate behavior, leading to increases in stock trading volumes and prices.…”

mentioning

confidence: 89%

Capital Markets for Small- and Medium-sized Enterprises and Startups in Korea

Binh¹,

Jhang²,

Park³

et al. 2020

JAFEB

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This study describes the structure of the capital markets for small-and medium-sized enterprises (SMEs) and startup companies in Korea, which is an emerging market that has experienced drastic changes. The overall capital market can be divided into private and public capital markets. In the private capital market, most of the demand for capital comes from non-listed private firms, including startups and SMEs. In the case of SMEs and startups, the KOSDAQ, the Korea New Exchange (KONEX), and primary collateralized bond obligations (P-CBOs) are part of the public capital market. SMEs and startups are generally incapable of raising sufficient capital owing to their low credit ratings, and they largely have limited access to primary markets to issue shares and borrow money. The Korean government has developed a systematic financial aid program to provide funds to these companies. The fund for SMEs has significantly contributed to the development of the venture capital market. Many Korean banks provide substantial lending to SMEs, but this lending is available only because of the Korean government's loan recovery guarantee. Furthermore, SMEs can issue corporate debt in the form of primary collateralized bond obligations through government guarantees, but such debt issuances have placed increasing pressure on public guarantee institutions.

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“…, 2012; Jenkinson & Ramadorai, 2013; Mortazian, 2022). However, some works are based on data from other markets (Bacmann, Dubois, & Ertur, 2002; De Carvalho & Pennacchi, 2012; Park et al. , 2016, Ahmed, Aney, & Banerji, 2019; Kwok, 2020; Bessler et al.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Considering the existing literature on the migration of companies between smaller and larger stock exchanges, Park, Binh and Eom (2016) distinguish two strands of research: the firm's point of view and the market's point of view. Studies from the firm's point of view mainly focus on what motivated firms to switch listings and how much they benefited from the switch or how much stock returns or operating profits changed after the switch.…”

Section: Literature Reviewmentioning

confidence: 99%

Listing switch and financial performance of companies: evidence from the Warsaw Stock Exchange

Podedworna-Tarnowska

2023

CEMJ

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PurposeThe purpose of this article is to present the results of empirical research concerning the identification of the impact of the transfer of companies from the alternative market to the regulated market of the Warsaw Stock Exchange on their operating and net performance.Design/methodology/approachThe study was conducted based on the empirical data of the companies that changed the listing place on the Warsaw Stock Exchange. Data regarding the years before the transfer were collected from the prospectuses of companies prepared mandatorily in connection with the transition to the regulated market. Data regarding the years of the event and subsequent years were obtained from companies' annual reports. As in other studies in the analysis, the operational metrics were used (operating return on sale, operating return on assets, total asset turnover), which was further extended to net profitability ratios (net return on ale, net return on asset, net return on equity). The significance analysis was based on the Student's t-test and Wilcoxon’s test.FindingsThe results show that before the transfer from the alternative market to the regulated market, companies improved financial performance. As a result of the change of listing venues, the results already collapsed in the year of the event. The downward trend continued in the following two years, with a noticeable improvement in the third year after the transfer.Originality/valueThe literature lacks such studies based on the Polish market. To the best knowledge of the author, this is one of the first studies in Poland showing the changes in operating and net performance of companies changing the stock listing venues. The research is based on a large group including all companies that have changed listing venues since the beginning of the alternative market in Poland. The article presents an original empirical result that can be used both by managers and investors in their decisions.

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The effect of listing switches from a growth market to a main board: An alternative perspective

Cited by 12 publications

References 30 publications

Does switching trading venues create value? Evidence from Hong Kong

Does switching trading venues create value? Evidence from Hong Kong

Capital Markets for Small- and Medium-sized Enterprises and Startups in Korea

Listing switch and financial performance of companies: evidence from the Warsaw Stock Exchange

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