In 2004, NASDAQ launched its dual listing program, which allows NYSE-listed
companies to list concurrently on NASDAQ. Investigating this innovation and the
impact of competitive interaction between the two markets on both order flow and
market liquidity, this study found that dual listing is associated with a
significant net growth in aggregate trading volume. Moreover, dual listing
narrows the bid–ask spreads on both markets. Overall, dual listing appears
to lower transaction costs and improve liquidity for traders on both
markets.