Shahrokh M. Saudagaran and Gary C. Biddle*　Santa Clara University and University of Washington, respectively　　Journal of International Management and Accounting 4:2 1992　　 Abstract 　Firms are increasingly listing their shares on foreign stock exchanges. However,not all exchanges have had equal appeal. Anecdotal evidence suggests that when firms are making foreign listing decisions, they are influenced by financial disclosure requirements. As a result, regulatory authorities around the globe are weighing increasing demands for foreign capital and investment opportunitiesagainst the desire to protect domestic investors from possibly misleading for- eign financial disclosures. The competitiveness of domestic stock excanges oftenhangs in the balance. 　This study examines a key question in this debate: whether firms' choices re- garding alternative foreign stock exchange listings are influenced by financial disclosure levels. Examined are the listings of 302 internationally traded firmswith at least one foreign listing, on one of nine major exchanges, as of year- end 1987. Also examined are changes in listings between 1981 and 1987, an im- portant design feature since these changes are more likely to have been influ- enced by differences across countries in financial disclosure levels during thisperiod. Financial disclosure levels are obtained from a survey of 142 experts actively involved in the foreign listing process. 　Test results based on the cross-section of listings at year-end 1987 are con- sistent with the hypothesis that exchange choices are influenced by financial disclosure levels. However, they do not lend support to a second hypothesis sugggesting that this effect should operate only for firms whose domestic dis- closure levels are lower than those of a given foreign exchange. Tests based on changes in listings between 1981 and 1987 support both hypotheses. Overall, the results lend credence to concerns expressed by regulatory authorities and ex- change officials that stringent disclosure levels could reduce access to foreigncapital and foreign investment opportunities.