Interlisting on U.S. exchange reduces trading costs for Canadian stocks.
The study looked at how trading costs change when Canadian stocks are listed on U.S. exchanges. They found that after listing in the U.S., trading costs decreased for Canadian stocks on the Toronto Stock Exchange. This decrease was more significant for stocks that saw a big increase in trading volume on the U.S. exchange. The researchers suggest that this drop in trading costs is due to increased competition between market makers in both countries.