Exit, Survival, and Competitive Equilibrium in Dealer Markets
In this study we analyze dealer exit, survival, and competitive equilibrium in the NASDAQ Stock Market using data from a unique period that entails major changes in regulatory and competitive environments. We decompose the forces that affect dealer survival into market factors and dealer attributes. Market factors encompass those variables that affect the demand for and profitability of dealer services as a whole. Variation in survival probability across dealers results mainly from their competitive advantages in business strategies, information, quote aggressiveness, access to order flow, and economies of scale. On the whole, our results suggest that dealer markets exhibit a Darwinian survival of the fittest.
Year of publication: |
2014
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Authors: | Chung, Kee H. ; Chuwonganant, Chairat |
Published in: |
The Financial Review. - Eastern Finance Association - EFA. - Vol. 49.2014, 3, p. 435-460
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Publisher: |
Eastern Finance Association - EFA |
Saved in:
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