Reputation Effects in Trading on The New York Stock Exchange  

Oleh:

Battalio, Robert ; Ellul, Andrew ; Jennings, Robert

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 62 no. 3 (Jun. 2007), page 1243-1272.
Topik: STOCK EXCHANGE; studies; reputations; stock exchange specialists; brokers; liquidity; adverse selection
Fulltext: p 1243.pdf (250.49KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Theory suggests that reputations allow nonanonymous markets to attenuate adverse selection in trading. We identify instances in which New York Stock Exchange (NYSE) stocks experience trading floor relocations. Although specialists follow the stocks to their new locations, most brokers do not. We find a discernable increase in liquidity costs around a stock's relocation that is larger for stocks with higher adverse selection and greater broker turnover. We also find that floor brokers relocating with the stock obtain lower trading costs than brokers not moving and brokers beginning trading post - move. Our results suggest that reputation plays an important role in the NYSE's liquidity provision process.

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