IDEAS home Printed from https://ideas.repec.org/a/taf/eurjfi/v21y2015i6p466-485.html
   My bibliography  Save this article

Market quality of dealer versus hybrid markets for illiquid securities: new evidence from the FTSE AIM Index

Author

Listed:
  • Andros Gregoriou

Abstract

This paper explores liquidity effects following the introduction of electronic limit-order trading for 48 illiquid stocks listed on the FTSE AIM Index. We find evidence of a sustained increase in the liquidity of the stocks as a result of limit-order trading. Furthermore, the enhancement in the liquidity of the stocks is due to a decrease in the direct cost of trading as opposed to a reduction in the asymmetric information cost of transacting. The empirical findings suggest that a hybrid market with a limit-order book and voluntary dealers outperforms a dealership market with obligatory market makers for illiquid stocks.

Suggested Citation

  • Andros Gregoriou, 2015. "Market quality of dealer versus hybrid markets for illiquid securities: new evidence from the FTSE AIM Index," The European Journal of Finance, Taylor & Francis Journals, vol. 21(6), pages 466-485, April.
    • Handle: RePEc:taf:eurjfi:v:21:y:2015:i:6:p:466-485
    DOI: 10.1080/1351847X.2013.838186
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1351847X.2013.838186
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1351847X.2013.838186?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chung, Kee H. & Park, Seongkyu “Gilbert” & Ryu, Doojin, 2016. "Trade duration, informed trading, and option moneyness," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 395-411.
    2. Gofran, Ruhana Zareen & Gregoriou, Andros & Haar, Lawrence, 2022. "Impact of Coronavirus on liquidity in financial markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 78(C).
    3. Zhang, Sijia & Gregoriou, Andros, 2019. "The price behavior around initial loan announcements: Evidence from zero-leverage firms in the UK," Research in International Business and Finance, Elsevier, vol. 50(C), pages 191-200.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:eurjfi:v:21:y:2015:i:6:p:466-485. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REJF20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.