Improving liquidity through efficient stock market structure and operational design
This study is an analysis of the secondary market liquidity on equity markets around the world. The role of operational design of stock exchanges in enhancing liquidity is assessed. The market structure within which exchanges operate is also shown to affect the optimal operational design and liquidity. Narrower tick sizes, designated market makers, centralized limit order books, computerized trading, and strong shareholder rights index all improve liquidity directly and indirectly. Interaction effects among these features result in hybrid auction-dealer systems outperforming pure limit order books or quote-based dealer systems in the race for better liquidity.
Volume (Year): 18 (2006)
Issue (Month): ()
|Contact details of provider:|| Postal: |
Phone: +1 212 284 8600
Web page: http://www.capco.com/
When requesting a correction, please mention this item's handle: RePEc:ris:jofitr:1278. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Springett)
If references are entirely missing, you can add them using this form.