Stock exchange

About: Stock exchange is a research topic. Over the lifetime, 39566 publications have been published within this topic receiving 612044 citations.

Crossing Networks and Dealer Markets: Competition and Performance

Abstract: This paper studies the interaction between dealer markets and a relatively new form of exchange, passive crossing networks, where buyers and sellers trade directly with one another We find that the crossing network is characterized by both positive ~“liquidity”! and negative ~“crowding”! externalities, and we analyze the effects of its introduction on the dealer market Traders who use the dealer market as a “market of last resort” can induce dealers to widen their spread and can lead to more efficient subsequent prices, but traders who only use the crossing network can provide a counterbalancing effect by reducing adverse selection and inventory holding costs COMPETITION BETWEEN EXCHANGES for order f low is a growing phenomenon in financial markets From London to Paris to Tel Aviv, exchanges and trading systems are introducing new trading mechanisms that compete for order f low In the United States, the SEC promulgated new rules that redefine the regulation of Alternative Trading Systems and intensify the competition between existing exchanges and new electronic markets Indeed, new electronic trading venues are cited as the reason for a decline in the value of seats on major exchanges, even though trading volumes are growing rapidly What will be the impact of new trading mechanisms on market participants and on existing dealer markets ~DMs!? In this paper we study the effect of introducing a passive call market that competes with an existing traditional DM The DM is based on competing market makers as in Nasdaq, the London Stock Exchange, the Foreign Exchange market, and the US government securities market An important benefit provided by the DM is the assurance of immediate execution An important disadvantage is the cost: the bid-ask spread, which can be substantial Traders who do not place a high value on immediacy and assured execution can try to reduce their trading costs by searching for counterparties on their own As computing and communication costs have declined, electronic communication networks have been increasingly deployed to reduce search costs, making it less costly for traders to find one another and reducing the demand for DMs

Stock Market Integration and Financial Crises: The Case of Asia

Abstract: This study examines long-run relationships and short-run dynamic causal linkages among the U.S., Japanese, and ten Asian emerging stock markets, with the particular attention to the 1997-1998 Asian financial crisis. Extending related empirical studies, comparative analyses of pre-crisis, crisis, and post-crisis periods are conducted to comprehensively evaluate how stock market integration is affected by financial crises. In general, the results for the case of Asia show that both long-run cointegration relationships and short-run causal linkages among these markets were strengthened during the crisis and that these markets have generally been more integrated after the crisis than before the crisis. Detailed country-by-country analyses are provided, which yield a variety of new results concerning the roles of individual countries in international stock market integration. An important implication of our findings is that the degree of integration among countries tends to change over time, especially around periods marked by financial crises.

Environmental Factors Influencing Accounting Disclosure Requirements of Global Stock Exchanges

Abstract: The globalization of capital markets has resulted in a great deal of attention being focused on problems created by accounting diversity in different countries. A number of studies have documented variations in accounting disclosure and reporting practices and standards in different countries. Diverse environmental factors have been cited in the literature to explain differences in disclosure levels between countries. This paper examines the relationship between environmental factors and the accounting disclosure requirements of stock exchanges in different countries. A cross-national disclosure model is developed to investigate the relationship of selected environmental factors and stock exchange disclosure requirements of 35 stock exchanges in different countries. Five environmental factors are used to explain the variation observed in disclosure requirements of the different stock exchanges. The five factors examined are: degree of economic development, type of economy, size of the equity market, activity on the equity market, and dispersion of stock ownership in the equity market. The overall results obtained from the cross-sectional regression indicate that the level of disclosure requirements of stock exchanges is related to the selected environmental factors in different countries. Of die five factors examined, however, only size of the equity market is found to be a significant explanatory variable.

Industry and Country Effects in International Stock Returns

Abstract: that international returns are predominantly driven by industry factors. Managers who believe that domestic market factors are more important for returns than industry factors decide on a country allocation first, then in the second stage select the most promising stocks from each country. This article presents a simple model to measure country and industry effects in international stock returns, and provides a quantitative framework for analyzing these two approaches to portfolio selection.' We show that there are three reasons for portfolio managers to pay more attention to the geographical than to the industrial composition of an international portfolio. Each of these reasons is based on the finding that country effects in international stock returns are larger than industry effects. First, tilting an international portfolio geographically leads, on average, to larger and more variable tracking errors than tilting the industrial composition of the portfolio. Second, stocks from the same domestic market but in different industries are closer substitutes than stocks from the same industry but in different countries. Finally, the benefits of international I