Technology upgrades in emerging equity markets: Effects on liquidity and trading activity
Orhan Erdem (),
Veysel Eraslan () and
Evren Arık ()
Finance Research Letters, 2015, vol. 14, issue C, 87-92
This study examines the effects of technological changes on liquidity of stock markets. Utilizing daily data of 361 stocks from 10 emerging market exchanges, namely Colombia, Indonesia, Johannesburg, Korea, Malaysia, Mexico, Russia, Shanghai, Shenzhen and Thailand, a panel data regression analysis shows that technological upgrade decreases the bid-ask spread and increases trading activity. In other words, launching a more sophisticated trading platform contributes to the overall liquidity of the market.
Keywords: Market microstructure; Technological upgrade; High frequency trading; Emerging markets; Liquidity (search for similar items in EconPapers)
JEL-codes: G12 G14 G15 G23 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:14:y:2015:i:c:p:87-92
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