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Competition Among Securities Markets: Can the Canadian Market Survive?


  • Cécile Carpentier
  • Jean-François L'Her
  • Jean-Marc Suret


According to Coffee (2002), the number of securities exchanges in the world is likely to eventually shrink radically, under the effects of globalization and technology, thus leading to the question of the survival of relatively small exchanges. However, little information exists regarding the current competitive position of the Canadian market, and there exists but scant evidence to document its evolution over the last decade. Two visions of the development of Canadian securities markets are proposed. Some view this market as thriving, observing no evidence that domestic capital markets have been abandoned by Canadian firms. In contrast, other authors depict the TSX as the Incredible Vanishing Exchange, asserting that it symbolizes the hollowing out of corporate Canada. In fact, Canadian firms represent the largest group of foreign stocks listed in the U.S. market, even though their number has apparently been decreasing since 1998. Our study presents evidence relative to the evolution and current competitiveness of the Canadian securities market. We also attempt to predict the effect competition will likely have on this market. Our general conclusion is that survival will probably constitute a real challenge for the Canadian securities market. Selon Coffee (2002), le nombre de Bourses dans le monde devrait diminuer radicalement, sous l'effet de la mondialisation et de la technologie. On peut alors s'interroger sur la survie des Bourses de petite taille. Peu d'informations sont actuellement disponibles quant à la position compétitive du marché boursier canadien et son évolution au cours de la dernière décennie. Deux visions de son développement sont avancées. Certains pensent que ce marché est florissant. Ils ne constatent aucune trace d'un abandon par les entreprises canadiennes. À l'opposé, d'autres décrivent le TSX comme une Bourse en perte de vitesse, qui serait en train de disparaître. En fait, les entreprises canadiennes constituent le plus important groupe de titres étrangers listés aux États-Unis, même si leur nombre semble diminuer depuis 1998. Notre étude analyse l'évolution du marché boursier canadien et sa position compétitive actuelle. Nous tentons de prévoir l'effet qu'aura la concurrence sur ce marché. Notre conclusion générale est que son plus grand défi est certainement sa survie.

Suggested Citation

  • Cécile Carpentier & Jean-François L'Her & Jean-Marc Suret, 2004. "Competition Among Securities Markets: Can the Canadian Market Survive?," CIRANO Working Papers 2004s-50, CIRANO.
  • Handle: RePEc:cir:cirwor:2004s-50

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    References listed on IDEAS

    1. Doidge, Craig & Karolyi, G. Andrew & Stulz, Rene M., 2004. "Why are foreign firms listed in the U.S. worth more?," Journal of Financial Economics, Elsevier, vol. 71(2), pages 205-238, February.
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    3. Ljungqvist, Alexander P. & Wilhelm, William Jr., 2002. "IPO allocations: discriminatory or discretionary?," Journal of Financial Economics, Elsevier, vol. 65(2), pages 167-201, August.
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    8. Carmine Di Noia, 2001. "Competition and Integration among Stock Exchanges in Europe: Network Effects, Implicit Mergers and Remote Access," European Financial Management, European Financial Management Association, vol. 7(1), pages 39-72.
    9. Steil, Benn, 2001. "Creating Securities Markets in Developing Countries: A New Approach for the Age of Automated Trading," International Finance, Wiley Blackwell, vol. 4(2), pages 257-278, Summer.
    10. Foerster, Stephen R. & Karolyi, G. Andrew, 1998. "Multimarket trading and liquidity: a transaction data analysis of Canada-US interlistings," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 8(3-4), pages 393-412, December.
    11. Jenkinson, Tim & Ljungqvist, Alexander, 2001. "Going Public: The Theory and Evidence on How Companies Raise Equity Finance," OUP Catalogue, Oxford University Press, edition 2, number 9780198295990.
    12. Charles Freedman & Walter Engert, 2003. "Financial Developments in Canada: Past Trends and Future Challenges," Bank of Canada Review, Bank of Canada, vol. 2003(Summer), pages 3-16.
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    securities exchange; competition; cross-listed securities; marché boursier; concurrence; titres interlistés;

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