Economics, Econometrics and Finance
4 years ago

Interlisting on US exchange reduces trading costs for Canadian stocks.

Journal of International Financial Markets Institutions and Money
Multimarket trading and liquidity: a transaction data analysis of Canada–US interlistings
Stephen R. Foerster, George Andrew Karolyi

Paper Summary

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The study looked at how trading costs change for Canadian stocks listed on both the Toronto Stock Exchange (TSE) and a US exchange. They found that after listing in the US, trading costs decreased in the TSE market. This decrease was more significant for stocks that saw a big increase in trading volume on the US exchange. This suggests that TSE market makers lowered their costs to compete with US market makers.