Do less regulated markets attract lower quality firms? Evidence from the London AIM market

Ulf Nielsson*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

20 Citations (Scopus)


The paper examines whether the moderately regulated London AIM market is at a disadvantage in attracting high quality firms. The results show that firms listed on AIM are of the same quality level as firms listed in the US and in Continental Europe, albeit smaller in size. Furthermore, the delisting and valuation pattern is the same across markets, whereas AIM listed firms raise relatively more capital. Thus, rather than catering to low quality firms seeking to conceal their type, the AIM market attracts small firms that - due to size - face disproportional regulatory costs, but are otherwise equivalent to firms listing in more regulated markets.

Original languageEnglish
Pages (from-to)335-352
Number of pages18
JournalJournal of Financial Intermediation
Issue number3
Publication statusPublished - Jul 2013

Bibliographical note

Funding Information:
I am thankful to Ailsa Röell, Pierre-André Chiappori, Dennis Kristensen, Charles Jones, Patrick Bolton, Daniel A. Rettl, Herdis Steingrimsdottir, Faten Ben Slimane, Siv Staubo, David Lando and Søren Hvidkjær for valuable comments and conversations. I also benefitted extensively from useful comments from participants at seminars at Columbia University, University of Iceland, the SGF 2011 conference in Zurich, the FMA 2011 European conference in Porto, the II World Finance Conference in Greece, the University of Valencia and the 17th Nordic Conference on Small Business Research in Helsinki. The author gratefully acknowledges financial support from the Danish Center for Accounting and Finance. All remaining errors are my own.

Other keywords

  • Competition
  • Delisting
  • Listing
  • Regulation
  • Stock exchanges


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