Demutualization, outsider ownership and stock exchange performance - empirical evidence

Academic contributions on the demutualization of stock exchanges so far have been predominantly devoted to social welfare issues, whereas there is scarce empirical literature referring to the impact of a governance chang
Academic contributions on the demutualization of stock exchanges so far have been predominantly devoted to social welfare issues, whereas there is scarce empirical literature referring to the impact of a governance change on the exchange itself. While there is consensus that the case for demutualization is predominantly driven by the need to improve the exchange's competitiveness in a changing business environment, it remains unclear how different governance regimes actually affect stock exchange performance. Some authors propose that a public listing is the best suited governance arrangement to improve an exchange's competitiveness. By employing a panel data set of 28 stock exchanges for the years 1999-2003 we seek to shed light on this topic by comparing the efficiency and productivity of exchanges with differing governance arrangements. For this purpose we calculate in a first step individual efficiency and productivity values via DEA. In a second step we regress the derived values against variables that - amongst others - map the institutional arrangement of the exchanges in order to determine efficiency and productivity differences between (1) mutuals (2) demutualized but customer-owned exchanges and (3) publicly listed and thus at least partly outsider-owned exchanges. We find evidence that demutualized exchanges exhibit higher technical efficiency than mutuals. However, they perform relatively poor as far as productivity growth is concerned. Furthermore, we find no evidence that publicly listed exchanges possess higher efficiency and productivity values than demutualized exchanges with a customer-dominated structure. We conclude that the merits of outside ownership lie possibly in other areas such as solving conflicts of interest between too heterogeneous members. JEL Classification: F39, G32, C23, C24, C61
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Metadaten
Author:Baris Serifsoy
URN:urn:nbn:de:hebis:30-15296
Series (Serial Number):Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting (157)
Document Type:Working Paper
Language:English
Date of Publication (online):2005/09/19
Year of first Publication:2005
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2005/09/19
Tag:DEA ; Malmquist-Productivity ; Tobit panel data regressions ; bootstrapping; demutualization ; effciency ; exchanges
Source:Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting ; 157
HeBIS PPN:188877096
Institutes:Wirtschaftswissenschaften
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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