Financial market competition: The effects of transparency

R. Huisman, K.G. Koedijk

Research output: Contribution to JournalArticleAcademicpeer-review


European and US financial markets are faced with increased competition for order flow. Fundamental in the competition process is the organization of the trading process, since this directly influences the performance and trading costs of those markets. In this paper we examine the effects of public quote disclosure and the disclosure of transaction information on market liquidity and price efficiency. Our results indicate a clear trade-off between efficiency and liquidity. These findings could explain why a variety of co-existing trading structures can be optimal among competitive financial markets.
Original languageEnglish
Pages (from-to)463-473
Issue number3
Publication statusPublished - 1998
Externally publishedYes

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