Competition between securities markets: stock exchange industry regulation in the Paris financial center at the turn of the twentieth century

Pierre Hautcoeur, Amir Rezaee and Angelo Riva ()
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Amir Rezaee: ISG - ISG International Business School [Paris]
Angelo Riva: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EBS Paris - European Business School Paris

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Abstract: We study two regulatory changes that affected competition between the transparent Parquet and the OTC-like Coulisse markets in Paris at the turn of the twentieth century. The two reforms determined three regimes of competition—illegal competition, free competition, and enforced monopoly. After documenting institutional changes and their political economy, we show that the Paris market touch (i.e., the average spread of securities traded in the two markets) widened under the free competition regime but narrowed under the enforced monopoly regime to a size much smaller than during the first. These results accord with recent literature that questions the effects of competition between transparent and opaque markets; a transparent monopoly might be more effective than competition if the latter involves opaque markets.

Keywords: Paris stock exchange; Market microstructures; Regulation; Monopoly; Consolidation; Fragmentation; Spreads (search for similar items in EconPapers)
Date: 2023
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Published in Cliometrica, 2023, 17, pp.261-299. ⟨10.1007/s11698-022-00248-7⟩

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Journal Article: Competition between securities markets: stock exchange industry regulation in the Paris financial center at the turn of the twentieth century (2023)
Working Paper: Competition between securities markets: stock exchange industry regulation in the Paris financial center at the turn of the twentieth century (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-03761767

DOI: 10.1007/s11698-022-00248-7

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