Int. Fin. Markets, Inst. and Money 19 (2009) 550–564 Contents lists available at ScienceDirect Journal of International Financial Markets, Institutions & Money journal homepage: www.elsevier.com/locate/intfin Liquidity minimization and cross-listing choice: Evidence based on Canadian shares cross-listed on U.S. venues Lawrence Kryzanowski a,∗ , Skander Lazrak b,1 a Finance Department, John Molson School of Business, Concordia University, 1455 de Maisonneuve Boulevard West, Montreal, Quebec, Canada H3G 1M8 b Department of Finance, Operations and Information Systems, Faculty of Business, Brock University, 500 Glenridge Avenue, St. Catherines, Ontario, Canada L2S 3A1 article info Article history: Received 21 June 2008 Accepted 7 August 2008 Available online 23 August 2008 JEL classification: G14 G15 Keywords: Cross-listing Market fragmentation Liquidity Trading costs abstract This paper examines whether a Canadian-listed firm seeking to cross-list in the U.S. needs to consider liquidity differences when making a choice among the main U.S. venues (AMEX, NYSE or NAS- DAQ). After controlling for firm characteristics, we find that trade costs for Canadian shares cross-listed in the U.S. do not depend on the U.S. cross-listing venue. This suggests that the choice of U.S. list- ing venue may be better motivated by the desire to minimize listing fees or to increase investor recognition and visibility. © 2008 Elsevier B.V. All rights reserved. 1. Introduction Karolyi (2006) identifies and surveys several motivations for the cross-listing of a firm’s shares. These include the reduction of benefits obtained by controlling shareholders by abiding to stricter rules or the bonding hypothesis, potentially favorable effects of higher disclosure requirements in the cross-listing market on the firm’s cost of capital, better access to capital markets, increased coverage by analysts, and the possibility of improved liquidity and price discovery in a multi-market trading platform. ∗ Corresponding author. Tel.: +1 514 848 2424x2782. E-mail addresses: lawrence.kryzanowski@concordia.ca (L. Kryzanowski), slazrak@brocku.ca (S. Lazrak). 1 Tel.: +1 905 688 5550x5113. 1042-4431/$ – see front matter © 2008 Elsevier B.V. All rights reserved. doi:10.1016/j.intfin.2008.08.001