The effect of insider restricted equity on the choice of exchange: An empirical study of the NYSE listing choices of NASDAQ firms.

摘要

This paper examines the effect of insider financial interest on the firm's choice of which exchange to list its stock. I find that firms with higher insider resale intensity and more insider ownership are more likely to stay on NASDAQ than to move to the NYSE. A one percent increase in the insider resale volume is associated with a thirteen percent decrease in the probability of switching to the NYSE. I also find that a ten per cent increase in the fraction of shares held by insiders is associated with a two per cent decrease in the probability of switching to the NYSE. This paper has policy implications for the rules which govern insider trading and implications for the methodology used in comparisons between NYSE versus NASDAQ listed firms.