Impact of MiFID II on Romanian Stock Market Liquidity—Comparative Analysis with a Developed Stock Market

Marius Cristian Miloș, Laura Raisa Miloș, Flavia Barna and Claudiu Boțoc
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Marius Cristian Miloș: Department of Finance, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Street, 300115 Timișoara, Romania
Laura Raisa Miloș: Department of Finance, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Street, 300115 Timișoara, Romania
Flavia Barna: Department of Finance, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Street, 300115 Timișoara, Romania
Claudiu Boțoc: Department of Finance, Faculty of Economics and Business Administration, West University of Timișoara, 16 Pestalozzi Street, 300115 Timișoara, Romania

IJFS, 2021, vol. 9, issue 4, 1-18

Abstract: In light of previous literature that has investigated the effects of MiFID and MiFID II regulation on stock market liquidity, we investigate whether the introduction of MiFID II in Romania has had any effect on the stock market liquidity. Through our empirical analysis, we were able to estimate a meaningful reduction of liquidity in the Romanian stock market liquidity, in response to MiFID II, in line with the previous empirical literature. We find that the liquidity of the BET index constituents has decreased in the period following MiFID II. We find contradictory results in what concerns the German stock market, which could be explained by the different level of development of the stock markets and of the financial education of investors.

Keywords: MiFID II; Bucharest Stock Exchange; liquidity; financial regulation (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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