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Anatomy of a regulatory race to the top : Changes in delisting rules at Korea’s two stock exchanges, 1999-2002

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  • Anatomy of a regulatory race to the top
  • Dewenter, Kathryn L.; Kim, Chang Soo; Novaes, Walter
  • Elsevier


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Title Anatomy of a regulatory race to the top
Similar Titles
Sub Title

Changes in delisting rules at Korea’s two stock exchanges, 1999-2002

Material Type Articles
Author(English)

Dewenter, Kathryn L.; Kim, Chang Soo; Novaes, Walter

Publisher

[Amsterdam, Netherlands]:Elsevier

Date 2010-06
Journal Title; Vol./Issue The Journal of Corporate Finance:
Pages 37
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Administration
Government and Law < Laws and Legislation
Holding SSRN

Abstract

One dimension of competition among stock exchanges is the quality of products they have to offer. In order to attract listings and trading volume, exchanges can affect the quality of their listed firms by altering their standards for firm disclosure and governance. We identify a competition with respect to delisting standards between Korea's two stock exchanges and show that it complies with the three components of a regulatory race to the top: external trigger, mobility among diverse regimes and meaningful changes that converge to similar rules. The race between the two Korean exchanges ended with stricter rules and better protected minority shareholders. The race also ended, however, with neither exchange gaining market share with respect to trading volume or new listings. Korea's experience, therefore, suggests a reason why these races are rare. (The rest omitted)