Cross-listings and home market trading volume: The case of Malaysia and Singapore
Abstract
Cross-listings of equities internationally are becoming more common. Using data for Europe and North America, previous studies reject the order flow diversion hypothesis, which states that international cross-listings reduce home-country trading volume. We test this hypothesis using data for equities cross-listed in Singapore and Malaysia. We find that trading volume in Malaysia fell 42.9% when Singapore markets were closed for holidays. Furthermore, we show that trading volume in Malaysia did not increase following the implementation of regulations that ended the trading of Malaysian equities in Singapore in 1998. Hence, we reject the order flow diversion hypothesis. © 2017 Wiley. All rights reserved.
Publication Title
Journal of Financial Research
Recommended Citation
Ting Lau, S., & McInish, T. (2002). Cross-listings and home market trading volume: The case of Malaysia and Singapore. Journal of Financial Research, 25 (4), 477-484. https://doi.org/10.1111/1475-6803.00032
