In this paper we investigate what drives the decision of stock exchanges to demutualize and going public, using a sample of 109 stock exchanges. We find that stock exchanges that demutualize and go public are in countries that have a higher level of economic and political freedom, facing greater competition from their peers. Demutualized exchanges go public to raise capital and because countries have even more freedom of capital controls. The motivation of stock exchanges to go publicly listed does not seem to be the same of “common companies”, we do not find evidence that larger, older and riskier stock exchanges go public. Stock exchanges seem to demutualize to merge, which we interpret as an additional signal of competition. We also find evidence that stock exchanges go public to make acquisitions and that they restructure internally before going public. Finally, we find regional preferences for non-demutualized exchanges. Associations are likely to come from South America, while governmental and member stock exchanges from Middle East.
