Professor Christian Leuz, Booth School of Business, University of Chicago

We analyse a comprehensive sample of more than 10,000 US stocks in the OTC (‘over-the-counter’) market. As little is known about this market, we first characterise OTC firms by trading venue and provide evidence on survival, success, frequency of venue changes, reporting status, and trading activity. A large number of new firms appear on the OTC market each year. With few exceptions, these new firms exhibit poor performance and rarely rise to trade on traditional exchanges. We analyse how market liquidity, price efficiency and crash risk, all of which capture aspects of market quality, differ across OTC venues and firms subject to different regulatory regimes, including federal securities and state blue sky laws. We show that OTC firms that are subject to stricter regulatory regimes have higher market liquidity and price efficiency, and lower return skewness. We also analyse OTC market features that are potential substitutes for SEC registration, such as publication in a securities manual or state merit reviews, and provide evidence on their capital-market effects. This evidence is relevant in light of the JOBS Act and the ensuing relaxation of SEC registration requirements. Overall, our results suggest that investors consider information and regulatory differences when trading OTC stocks.

This seminar is organised in association with the Cambridge Corporate Governance Network (CCGN).

Speaker bio

Christian Leuz is the Joseph Sondheimer Professor of International Economics, Finance and Accounting at the University of Chicago’s Booth School of Business. He is also a Co-Director of the Initiative on Global Markets, a Research Associate at the National Bureau of Economic Research and at the European Corporate Governance Institute and a Fellow at Wharton’s Financial Institution Center, Goethe Universität Frankfurt’s Center for Financial Studies, and the CESifo Research Network. His research examines the role of corporate disclosures, accounting transparency and disclosure regulation in capital markets, corporate governance and corporate financing. His work has been published among others in the Journal of Accounting Research, Journal of Accounting & Economics, Journal of Financial Economics, and the Review of Financial Studies. He has received several awards and honours, including an Humboldt Research Award, the 2011 Wildman Medal Award, the 2010 Notable Contribution to the Accounting Literature Award as well as a JFE All Star Paper Award. Professor Leuz is an editor for the Journal of Accounting Research and has served on many editorial boards, including the Journal of Accounting & Economics, The Accounting Review, the Journal of Business, Finance and Accounting, and the Review of Accounting Studies.

Born in Germany, Professor Leuz earned his doctoral degree and Habilitation at the Goethe University Frankfurt in Germany. Prior to this position, he was the Harold Stott Term Assistant Professor in Accounting at the Wharton School of the University of Pennsylvania and a visiting doctoral fellow at the Simon School of Business, University of Rochester.

House icon Address

Room 107 (Keynes House)
Trumpington St
Cambridge
CB2 1QA

Clock icon Date & time

Date: 2 May 2014
Start Time: 12:30
End Time: 13:30

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Open to: Members of the University of Cambridge

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Event location


Trumpington St
Cambridge
CB2 1QA

Event timings

Date: 2 May 2014
Start Time: 12:30
End Time: 13:30