Companies that transfer from Nasdaq to the NYSE Big Board enjoy lower volatility and lower execution costs, according to research from the New York Stock Exchange.

The conclusions come from an NYSE study that examined 67 companies that transferred to the NYSE from Nasdaq between 2002-2005. Updating a 2003 study that compared the market quality for 39 companies, which transferred from the Nasdaq to the NYSE in 2002 and 2003, the updated and expanded study measures the intra-day volatility for the 67 companies that moved from Nasdaq to the NYSE between 2002-2005.

It found that price volatility and average execution costs were reduced by more than a third after the companies moved to the NYSE, and that average quoted spreads were 46% lower on the NYSE. It also found that average intraday volatility measured in five-minute intervals decreased by 34% on average for the 67 companies following their transfers to the NYSE.

The study also found that average execution costs incurred by institutions and individual investors decreased by 38%. Average quoted spreads were 46% lower on the NYSE. Also, the profitability of intermediaries decreased significantly on the NYSE. On average, financial intermediaries such as market makers earned US4¢ per share on Nasdaq. Once on the NYSE, the per-share intermediary profitability fell to US0.2¢.

“Companies that transferred their listings from Nasdaq to the NYSE between 2002 to 2005 have benefited from substantial increases in quality of trading in their stocks,” said NYSE chief economist Paul Bennett, co-author of the study. “These findings show that the NYSE provides the better market for companies, which directly benefits investors.”

The NYSE says that reducing price volatility is important for companies because it lowers their cost of capital. Lower volatility also translates into savings for investors who would otherwise be buying and selling stocks at unnecessary high or low prices. The update of the original study was conducted on the stocks of 67 companies that voluntarily transferred from January 2002 to December 2005, comparing the market quality of these stocks two months before and two months after the listing transfer.