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1 – 10 of over 202000Rebecca Abraham and Charles W. Harrington
We propose a novel method of forecasting equity option spreads using the degree of multiple listing as a proxy for expectations of future spreads. Spreads are a transactions fee…
Abstract
We propose a novel method of forecasting equity option spreads using the degree of multiple listing as a proxy for expectations of future spreads. Spreads are a transactions fee for traders. To determine the future spreads on options being considered for purchase, traders must take current market trends affecting spreads into account. One such trend is the continued decline in spreads due to the multiple listing of options. Options listed on 4–6 exchanges compete more intensely than those listed on fewer exchanges, so that they may be expected to experience greater future declines in spreads. This study identifies the listing dates and number of listed exchanges for options listed on up to six exchanges as of May 2005. Listing criteria for multiple listing are defined with short- and long-term volumes, market capitalization, net income, and total assets being significant determinants of multiple listing. Short- and long-term volumes were found to have no explanatory power for multiple listing. Ranges of listing criteria are specified so that traders may locate the options of their choice.
This study examines the effects of exchange listing change on firms that voluntarily switched from American Stock Exchange to Nasdaq. Prior studies find increased bid‐ask spreads…
Abstract
This study examines the effects of exchange listing change on firms that voluntarily switched from American Stock Exchange to Nasdaq. Prior studies find increased bid‐ask spreads in the short‐term period for these firms after the listing changes. This study extends the literature by examining the long‐term effects of the listing change from American Stock Exchange to Nasdaq. The results suggest that there were no significant changes in bid‐ask spreads, number of trades, and percentage of shares traded from the immediate period after the listing change to the much later periods. This study also finds that there was no significant change in the number of shareholders after the switch. The findings suggest that there is no improvement in liquidity and investor recognition for the switching firms.
Min-Yu (Stella) Liao and Chris Tamm
We examine what changes, if any, firms are making to their capital structure around the time they cross-list because both of these affect a firm’s corporate governance. Cross…
Abstract
Purpose
We examine what changes, if any, firms are making to their capital structure around the time they cross-list because both of these affect a firm’s corporate governance. Cross-listing requires firms to follow SEC rules and regulations, which helps improve the firm governance. A firm’s capital structure, specifically the use of debt, is an effective way to mitigate the conflict between managers and shareholders by reducing the cash available to managers. We examine whether these governance mechanisms are complimentary or being used as substitutes by cross-listing firms.
Methodology
We compare the capital structures of Level II and Level III cross-listing firms from both civil law and common law countries in the three years before and the three years after cross-listing.
Findings
We show firms are significantly reducing their debt to equity ratio after the cross-listing. This reduction is shown for both Level II and Level III firms; however, it is primarily seen in civil law countries.
Practical implications
The corporate governance improvement firms recognize by cross-listing is partially offset by the reduced use of debt after the cross-listing. These governance characteristics may be especially relevant for shareholders in Level III cross-listings because those firms are actually raising addition cash.
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Shaw Chen, Bing-Xuan Lin, Yaping Wang and Liansheng Wu
The effectiveness of corporate governance is a major factor in forecasting firm performance. We examine the relationships among cross-listing, corporate governance and firm…
Abstract
The effectiveness of corporate governance is a major factor in forecasting firm performance. We examine the relationships among cross-listing, corporate governance and firm performance for a sample of Chinese cross-listed companies. We show that cross-listed firms display higher overall quality of corporate governance compared to non-cross-listed firms. Consequently better corporate governance results in higher operating performance. Our results support the bonding hypothesis of cross-listing. Furthermore, we also illustrate that the cross-listing status encapsulates the higher quality of corporate governance that leads to higher operating performance. When forecasting performance of cross-listing companies, it is therefore important to recognize the substitute effect between cross-listing and corporate governance.
Adam Teufel and Christopher J. Geissler
To introduce and analyze recent amendments to the rules of three US securities exchanges to add specific continued listing standards applicable to exchange-traded funds (ETFs).
Abstract
Purpose
To introduce and analyze recent amendments to the rules of three US securities exchanges to add specific continued listing standards applicable to exchange-traded funds (ETFs).
Design/methodology/approach
Provides an introduction and summary overview of the topic, summarizes the scope of the rule changes, discusses the industry reaction to the proposed rule changes and the regulator’s response, notes the applicability of the rule changes to ETFs relying on their own fund-specific regulatory relief, and identifies compliance dates.
Findings
Each of three US securities exchanges filed separate proposals to amend their listing standards to add specific continued listing standards for ETFs. Notwithstanding various concerns expressed in comment letters from key industry participants, by March 2017 the Securities and Exchange Commission (SEC) approved all three proposals in substantially the form proposed.
Practical implications
ETF sponsors should note that significant compliance enhancements may be required to ensure proper and continuous testing of securities in an ETF’s underlying index and/or portfolio in lieu of testing for compliance solely at the time of initial listing or at the time of an investment decision. The rule changes are scheduled to take effect by October 1, 2017.
Originality/value
Practical analysis from a premier financial services law firm on the issues presented by the ETF rule changes.
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Fuzhen Liu, Kee-hung Lai and Chaocheng He
To promote the success of peer-to-peer accommodation, this study examines the effects of online host–guest interaction as well as the interaction's boundary conditions of listing…
Abstract
Purpose
To promote the success of peer-to-peer accommodation, this study examines the effects of online host–guest interaction as well as the interaction's boundary conditions of listing price and reputation on listing popularity.
Design/methodology/approach
Using 330,686 data collected from Airbnb in the United States of America, the authors provide empirical evidence to answer whether social-oriented self-presentation and response rate influence listing popularity from the perspective of social exchange theory (SET). In addition, the authors investigate how these two kinds of online host–guest interactions work with listing price and reputation to influence listing popularity.
Findings
The results reveal the positive association between online host–guest interaction and listing popularity. Notably, the authors find that listing price strengthens but listing reputation weakens the positive effects of online host–guest interactions on listing popularity in peer-to-peer accommodation.
Originality/value
This study is the first attempt to adopt SET to explain the importance of online host–guest interactions in influencing listing popularity as well as examine the moderating role of listing price and reputation on the above relationship.
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In this paper, the authors examine the relation between cross-listing and the noncompliance with the mandatory corporate social responsibility (CSR) expenditure regulation in…
Abstract
Purpose
In this paper, the authors examine the relation between cross-listing and the noncompliance with the mandatory corporate social responsibility (CSR) expenditure regulation in India, the first country to legally mandate the CSR expenditure.
Design/methodology/approach
The authors apply panel logit and ordinary least square (OLS) regression models to examine the impact of cross-listing on the noncompliance with the mandatory CSR expenditure regulation because panel regression has lesser multicollinearity problems and has the benefit of controlling for individual or time heterogeneity mostly present in cross-section or time series data.
Findings
Using a sample of 1,027 listed Indian firms, the authors show that the cross-listed firms are more likely to comply with the mandatory CSR expenditure than non-cross-listed firms. The authors further show that this relation holds only for those firms which are exposed to higher agency problems, for firms affiliated to business groups and for firms operating in high litigation risk industries. Finally, the authors show that cross-listed firms complying with the mandatory CSR expenditure command more valuation premiums.
Practical implications
This study’s results suggest that the noncompliance of the Indian firms with the mandatory CSR expenditure regulation comes down once they cross-list their shares in the US or the UK since such firms have to bond to the stronger corporate governance standards of the listed country. Hence, the authors recommend that merely making the investment in CSR activities mandatory may not serve the purpose and the convergence in corporate governance as well as compliance with the CSR expenditure can be achieved through cross-listing in US and UK markets.
Originality/value
One, the authors analyze the effect of cross-listing on the likelihood and magnitude of noncompliance with the CSR mandate. Two, this study is based in India where CSR expenditure has been made mandatory under the Companies Act, 2013. Using CSR mandate as a natural experiment, the authors have access to a richer data set on CSR in terms of the actual expenditure made by the company on CSR activities and the mandatory amount to be spent in a particular year.
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Shallu Batra, Mohit Saini, Mahender Yadav and Vaibhav Aggarwal
This study aims to conduct a comprehensive bibliometric analysis to determine the intellectual structure of cross-listing studies and suggests a road map for future research in…
Abstract
Purpose
This study aims to conduct a comprehensive bibliometric analysis to determine the intellectual structure of cross-listing studies and suggests a road map for future research in this field.
Design/methodology/approach
A step-by-step procedure was carried out. With the help of a defined search string, 580 articles from reputed journals have been retrieved from the Scopus database. Bibliographic coupling and keyword analysis were executed to understand the current research scenario and future research directions in this research field. In addition, R Studio combined with VOSviewer was employed to analyse and visualise the data.
Findings
The results provide a deeper insight into publication trends, most prolific countries, institutions and journals in the area of cross-listing. The highest collaboration was observed between the authors in the USA and Canada. Moreover, the results contradict Bradford's and Lotka's laws. A thorough review of the literature identifies five clusters in this domain. Finally, keyword analysis offers a future road map in cross-listing research.
Originality/value
Researchers have shown greater interest in cross-listing topics over the past decades. Even though the research volume on this subject is increasing, the current retrospective is still insufficient. To the best of the authors' knowledge, this study is the first to provide valuable insights to practitioners, academicians, and prospective researchers about the intellectual structure of cross-listing and also offers future avenues in this research field through bibliometric analysis.
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Indranil Ghosh, Rabin K. Jana and Mohammad Zoynul Abedin
The prediction of Airbnb listing prices predominantly uses a set of amenity-driven features. Choosing an appropriate set of features from thousands of available amenity-driven…
Abstract
Purpose
The prediction of Airbnb listing prices predominantly uses a set of amenity-driven features. Choosing an appropriate set of features from thousands of available amenity-driven features makes the prediction task difficult. This paper aims to propose a scalable, robust framework to predict listing prices of Airbnb units without using amenity-driven features.
Design/methodology/approach
The authors propose an artificial intelligence (AI)-based framework to predict Airbnb listing prices. The authors consider 75 thousand Airbnb listings from the five US cities with more than 1.9 million observations. The proposed framework integrates (i) feature screening, (ii) stacking that combines gradient boosting, bagging, random forest, (iii) particle swarm optimization and (iv) explainable AI to accomplish the research objective.
Findings
The key findings have three aspects – prediction accuracy, homogeneity and identification of best and least predictable cities. The proposed framework yields predictions of supreme precision. The predictability of listing prices varies significantly across cities. The listing prices are the best predictable for Boston and the least predictable for Chicago.
Practical implications
The framework and findings of the research can be leveraged by the hosts to determine rental prices and augment the service offerings by emphasizing key features, respectively.
Originality/value
Although individual components are known, the way they have been integrated into the proposed framework to derive a high-quality forecast of Airbnb listing prices is unique. It is scalable. The Airbnb listing price modeling literature rarely witnesses such a framework.
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