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Stock exchange alliances, access fees and competition

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  • Shy, Oz
  • Tarkka, Juha

Abstract

This paper investigates the market consequences of alliance formation among stock exchanges.These alliances enable brokers to match investors internationally at their local market, thereby eliminating the need for brokers to maintain memberships in foreign stock exchanges.We sort out the conditions under which alliance formation increases profits for stock exchanges and brokers, and how changes in fee structures affect investors' participation rates and welfare.Finally, we examine several methods for implementing access fees and their welfare implications.

Suggested Citation

  • Shy, Oz & Tarkka, Juha, 2001. "Stock exchange alliances, access fees and competition," Bank of Finland Research Discussion Papers 22/2001, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp2001_022
    as

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    File URL: https://www.econstor.eu/bitstream/10419/211900/1/bof-rdp2001-022.pdf
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    References listed on IDEAS

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    1. Pagano, Marco & Randl, Otto & Roell, Ailsa A. & Zechner, Josef, 2001. "What makes stock exchanges succeed? Evidence from cross-listing decisions," European Economic Review, Elsevier, vol. 45(4-6), pages 770-782, May.
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    4. Marco Pagano, 1989. "Trading Volume and Asset Liquidity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(2), pages 255-274.
    5. Laffont, Jean-Jacques & Tirole, Jean, 1996. "Creating Competition through Interconnection: Theory and Practice," Journal of Regulatory Economics, Springer, vol. 10(3), pages 227-256, November.
    6. Shy,Oz, 2001. "The Economics of Network Industries," Cambridge Books, Cambridge University Press, number 9780521800952, September.
    7. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
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    Cited by:

    1. Kemppainen, Kari, 2003. "Competition and regulation in European retail payment systems," Bank of Finland Research Discussion Papers 16/2003, Bank of Finland.
    2. Hasan, Iftekhar & Schmiedel, Heiko, 2003. "Do networks in the stock exchange industry pay off? European evidence," Bank of Finland Research Discussion Papers 2/2003, Bank of Finland.

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