Stock exchanges as platforms for data and trading

Terrence Hendershott, Marc Rysman and Rainer Schwabe

Journal of Financial Markets, 2025, vol. 75, issue C

Abstract: We study linkages between stock exchanges' proprietary data sales and trading activity by analyzing the introduction of a new data product, the New York Stock Exchange's Integrated Feed (NYSE IF). Consistent with trading and data being complements, firms that subscribed to the NYSE IF increased their share of trading on the NYSE. In principle, firms subscribing to the NYSE IF could impose a negative externality on non-subscribing firms due to increased information asymmetry. However, consistent with information purchases having a positive network externality due to increased liquidity, non-subscribing firms also increased their share of trading on the NYSE.

Keywords: Stock exchanges; Proprietary market data; Platform competition; Multi-sided markets; Externalities (search for similar items in EconPapers)
JEL-codes: G10 L50 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:75:y:2025:i:c:s1386418125000266

DOI: 10.1016/j.finmar.2025.100986

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