Stock exchange is traditionally considered as “Broker’s club” which inconsequence tarnishes the images of this market in the mind of the people. The advancement of the technology and media explosion have broader the wisdom of business in the field of the stock markets. The demutualization is process where any shareholders become the member of company and receiving a mark able response in some countries of the world. The purpose of the study was to investigate whether demutualization lead to better performance of the stock exchanges in emerging economy? Sample of the study was comprised of three stock exchanges; Bombay Stock Exchange, National Stock Exchange of India and Tehran Stock Exchange respectively. The data of the study was collected from annual reports of these stock exchanges each two years before and after demutualization. A Paired Sample T-test and Wilcoxon sign rank were used to evaluate the empirical data regarding the financial performance of the stock exchanges and nominal data about itself changes in stock exchanges after demutualization. Paired Sample T-test results about the financial performance showed significant difference in all dimensions except the fixed assets turnover ratio difference. Similarly, Wilcoxon sign rank test showed that most of the stock exchanges are performing better after the demutualization in many dimension except in fixed assets utilization. The recommendations of the study are quite helpful for formulating policy of demutualization in Pakistan. The scope of the study can be extended to the other countries of the region and especially the developed countries where demutualization is being exercised.
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