Transparency and Liquidity: A Controlled Experiment on Corporate Bonds
This article reports the results of an experiment designed to assess the impact of lastsale trade reporting on the liquidity of BBB corporate bonds. Overall, adding transparency has either a neutral or a positive effect on liquidity. Increased trans is not associated with greater trading volume. Exc...
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| Veröffentlicht in: | The Review of financial studies 2007-03, Vol.20 (2), p.235-273 |
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| container_end_page | 273 |
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| container_issue | 2 |
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| container_title | The Review of financial studies |
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| creator | Goldstein, Michael A. Hotchkiss, Edith S. Sirri, Erik R. |
| description | This article reports the results of an experiment designed to assess the impact of lastsale trade reporting on the liquidity of BBB corporate bonds. Overall, adding transparency has either a neutral or a positive effect on liquidity. Increased trans is not associated with greater trading volume. Except for very large trades, spreads on newly transparent bonds decline relative to bonds that experience no transparency change. However, we find no effect on spreads for very infrequently traded bonds. The observed decrease in transaction costs is consistent with investors' ability to negotiate better terms of trade once they have access to broader bond-pricing data. |
| doi_str_mv | 10.1093/rfs/hhl020 |
| format | Article |
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| ispartof | The Review of financial studies, 2007-03, Vol.20 (2), p.235-273 |
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| language | eng |
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| source | EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; Oxford University Press Journals All Titles (1996-Current) |
| subjects | Bond issues Bond markets Bond portfolios Bond principal Bond ratings Bonds Corporate bonds Corporate debt Cost estimates Cost reduction Costs Customers Experiments Financial bonds Financial portfolios High yield investments Liquidity Municipal bonds Prices Spread Studies Terms of trade Trade Trade volume |
| title | Transparency and Liquidity: A Controlled Experiment on Corporate Bonds |
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