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The liquidity cost implications arising from the attraction of regional primary listings: Evidence from West Africa

The liquidity cost implications arising from the attraction of regional primary listings: Evidence from West Africa
The liquidity cost implications arising from the attraction of regional primary listings: Evidence from West Africa

This study reviews the liquidity costs for firms in outlying regions in primary listing on a centralized stock exchange. Using a unique hand-collected sample comprising all listed firms from across West Africa we find evidence that firms from outlying regions do have higher illiquidity costs although these can be mitigated from improvements in transparency that are associated with increasing familiarity amongst investment community of central exchange. This evidence has implications regarding the integration of stock exchanges in developing regions where this is likely to result in a greater concentration of liquidity mitigating intended optimal redistribution of capital and resources.

Emerging financial markets, Liquidity, Liquidity determinants, West Africa
0275-5319
91-110
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2
Hearn, Bruce
45dccea3-9631-4e5e-914c-385896674dc2

Hearn, Bruce (2014) The liquidity cost implications arising from the attraction of regional primary listings: Evidence from West Africa. Research in International Business and Finance, 30 (1), 91-110. (doi:10.1016/j.ribaf.2013.06.002).

Record type: Article

Abstract

This study reviews the liquidity costs for firms in outlying regions in primary listing on a centralized stock exchange. Using a unique hand-collected sample comprising all listed firms from across West Africa we find evidence that firms from outlying regions do have higher illiquidity costs although these can be mitigated from improvements in transparency that are associated with increasing familiarity amongst investment community of central exchange. This evidence has implications regarding the integration of stock exchanges in developing regions where this is likely to result in a greater concentration of liquidity mitigating intended optimal redistribution of capital and resources.

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More information

Accepted/In Press date: 6 June 2013
e-pub ahead of print date: 21 June 2013
Published date: January 2014
Keywords: Emerging financial markets, Liquidity, Liquidity determinants, West Africa

Identifiers

Local EPrints ID: 423337
URI: http://eprints.soton.ac.uk/id/eprint/423337
ISSN: 0275-5319
PURE UUID: 8f526ae6-a012-44ef-b2d5-7b052863227f
ORCID for Bruce Hearn: ORCID iD orcid.org/0000-0001-9767-0198

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Date deposited: 20 Sep 2018 16:30
Last modified: 10 Dec 2019 01:23

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Author: Bruce Hearn ORCID iD

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