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We study the effects of exchange uplisting from the modern over-the-counter (OTC) markets on liquidity, volatility, and price discovery. In a series of difference-in-differences tests, we find that for a sample of OTC treatment firms that uplist to the NASDAQ, New York Stock Exchange (NYSE), or NYSE MKT, relative to matched control firms, liquidity improves dramatically after listing. We also show that price discovery improves for treatment firms vis-à-vis control firms after listing. The results contribute to the discussion surrounding the facilitation of capital formation and offer important insights to investors, managers, and exchange officials.

This paper examines the impact of credit default swaps (CDS) on firms' financing and trade credit policies. Our results indicate firms with CDS trading on their debt increase their equity issuances. Further, firms with CDS trading on their debt and high levels of long-term debt issuances decrease their debt financing. Total and idiosyncratic risks are also higher for firms with CDS trading on their debt. These firms pay their suppliers and collect from their customers quicker. Thus, the impacts of the CDS market are not limited to the borrowing firms but also affect economically connected firms.

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