On the Formation and Structure of International Exchanges

35 Pages Posted: 11 Nov 2008

See all articles by Matthew J. Clayton

Matthew J. Clayton

University of Virginia - McIntire School of Commerce

Bjorn Jorgensen

London School of Economics & Political Science (LSE) - Department of Accounting and Finance

Kenneth A. Kavajecz

Phoenix Rising Advisory

Multiple version iconThere are 2 versions of this paper

Date Written: September 1999

Abstract

We investigate the formation and structure of 248 financial exchanges throughout the world. First, we empirically analyze the determinants of exchange formation as well as the impact of exchange formation on the domestic country's economy. Second, conditional on formation, we use a probit model to relate the choice of trading mechanism to the characteristics of the economic environment in which the exchange exists. We find that the main determinants of exchange formation in a country are the degree of economic freedom, the growth of the economy, the availability of technology, and the legal system. In addition, we find that the impact of exchange formation on the macro economy is limited to a reduction in the growth of the monetary aggregates with no significant impact on productivity. Lastly, our results show that the choice of trading mechanism depends on the country's economic development, the degree of competition, and the extent of economic freedom.

Suggested Citation

Clayton, Matthew J. and Jorgensen, Bjorn N and Kavajecz, Kenneth A., On the Formation and Structure of International Exchanges (September 1999). NYU Working Paper No. FIN-99-057, Available at SSRN: https://ssrn.com/abstract=1298330

Matthew J. Clayton (Contact Author)

University of Virginia - McIntire School of Commerce ( email )

P.O. Box 400173
Charlottesville, VA 22904-4173
United States
434-243-4043 (Phone)
434-924-7074 (Fax)

Bjorn N Jorgensen

London School of Economics & Political Science (LSE) - Department of Accounting and Finance ( email )

Department of Accounting Room, OLD 2.17
Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www.lse.ac.uk/accounting/people/bjorn-jorgensen

Kenneth A. Kavajecz

Phoenix Rising Advisory ( email )

519 NORTH PINCKNEY STREET
MADISON, WI 53703
United States
6087704677 (Phone)

HOME PAGE: http://www.pr-advisory.com

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
49
Abstract Views
729
PlumX Metrics