Stock Exchanges Requirements to Share Issuers as the Determinant of Companies' Value

Despite there are a lot of stock exchanges in the world and all of them publish listing requirements there is no evidence how these requirements influence value of companies listed on stock exchanges. Also, there are many research papers devoted to analysis of factors of companies’ value but they do not take listing rules into account although they focus on decreasing risks not covered by other factors. Therefore, this research focuses on analyzing the impact of listing rules on standard measures of companies' value that are applicable for the whole stock market—P/E and Tobin's Q. After studying listing rules published by 80 stock exchanges the scale for quantitative measuring each type of requirements (size, liquidity, profitability and information disclosure) was determined and stock exchanges were ranged by each criterion. According to this, listing requirements of stock exchanges from developed markets turned out to be tougher than those of emerging markets. According to regression results, these requirements have significant impact on companies’ value. Emerging markets are characterized by higher importance of size and requirements concerning liquidity than developed markets because there can be many companies of low size and liquidity on such markets.