Effects of Horizontal M&As on Trading Volume of Stock Exchanges

The ever increasing competition in the capital markets and globalization necessitated that structural changes taking place in stock exchanges, particularly M&As among them being watched closely by securities markets throughout the world. In this study effects of macroeconomic variables on trading volumes of 20 equity exchanges are examined by taking into account M&As that took place in the last 15 years. The exchanges include both the developed (eg. USA, UK, Japan) and developing (eg. Mexico, Korea, Poland) countries. The monthly data for period 1995-2010 is analysed using regression, taking the proper precautions for autocorrelation and heteroscedasticity problems, frequently encountered in time series data sets. The effects of macroeconomic variables on trading volume is observed though with a changing degree and results show that some of the M&As had positive effects on trading volume, whereas some did not.