Competitive Stock Markets: Evidence from Companies’ Dual Listings on the NYSE and NASDAQ

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.