Offshore listing of Korean equity index derivatives and domestic market adjustment: evidence from the KOSPI 200 index

This study examines how the offshore listing of Korean equity index derivatives is associated with the domestic KOSPI 200 market. We focus on the launch of Morgan Stanley Capital International (MSCI) Korea Index Futures on Eurex Exchange on July 14, 2025, which created a regulated offshore venue for international investors to trade Korean equity market exposure. Using daily data from January 2024 to May 2026, we analyze changes in the domestic KOSPI 200 market through short-run event-window tests and long-run interrupted time-series regressions. The results show that domestic trading activity declines immediately after the offshore listing, but this short-run decline does not coincide with a significant deterioration in liquidity. Over the longer horizon, KOSPI 200 trading activity and liquidity improve, suggesting that offshore listing may strengthen cross-market linkages and domestic market depth. However, the KOSPI 200's relative market share declines, indicating a redistribution of trading activity across related domestic benchmark products. We also find changes in investor participation: institutional participation increases around the event, while foreign investors' domestic trading share declines over time. Finally, KOSPI 200 volatility becomes more sensitive to the Cboe Volatility Index (VIX) after the offshore listing, suggesting stronger transmission of global volatility shocks. Overall, offshore listing appears to improve some dimensions of domestic market quality while reshaping market structure and increasing exposure to global risk conditions.