Sequential Search for Corporate Bonds

Mahyar Kargar, Benjamin Lester, Sébastien Plante and Pierre-Olivier Weill

No 31904, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In over-the-counter (OTC) markets, customers must find a counterparty to trade. Little is known about this process, however, because existing data is comprised of transaction records, which are only informative about the end of a search. Leveraging data from the leading trading platform for corporate bonds, we study the search process: we analyze customers’ repeated attempts to trade (successful and unsuccessful). We estimate that it takes two to three days to complete a transaction after an unsuccessful attempt, with substantial variation across trade and customer characteristics. Our analysis offers insights into the sources of trading delays in OTC markets.

JEL-codes: D83 G0 G10 G12 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-fmk
Note: AP
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Working Paper: Sequential Search for Corporate Bonds (2025)
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