Evaluation of the impact of the demutualization process on stock exchange value

Since the business climate of stock exchanges is facing many challenges due to many turbulent changes, traditional stock exchanges are no longer able to keep up with these changes as they lack the required financial flexibility to do so. As a result, many have changed their ownership and governance structure by adopting the strategy of "demutualization". This study examined the impact of demutualization on its financial performance and internal governance mechanisms. Also, the study examined the impact of the changes in internal governance mechanisms on the exchange’s financial performance. Consequently, several empirical models were constructed and nine hypotheses were developed and tested by applying multivariate regression analysis by utilizing unbalanced panel dataset of the stock exchanges that are members of World Federation of Exchanges during the period of 1995-2012.