One for the money, two for the show? The number of designated market makers and liquidity


Theissen, Erik ; Westheide, Christian



DOI: https://doi.org/10.2139/ssrn.4202201
URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Document Type: Working paper
Year of publication: 2022
The title of a journal, publication series: SSRN Working Paper Series
Place of publication: Rochester, NY
Publishing house: SSRN
Publication language: English
Institution: Business School > ABWL u. Finanzierung (Theissen)
Subject: 330 Economics
Classification: JEL: G10 , G14,
Keywords (English): designated market makers , liquidity
Abstract: Prior research has established that the presence of designated market makers (DMMs) in an electronic open limit order book increases liquidity. We analyze whether the presence of additional DMMs results in a further improvement in liquidity. Using data from Deutsche Börse’s Xetra system we find that increases in the number of DMMs significantly improve liquidity, and vice versa for decreases in the number of DMMs. Our results are confirmed when we use an instrumental variables approach to overcome potential endogeneity issues.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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BASE: Theissen, Erik ; Westheide, Christian

Google Scholar: Theissen, Erik ; Westheide, Christian

ORCID: Theissen, Erik ORCID: 0000-0003-4460-8168 ; Westheide, Christian

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