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- Title
The Effects of Market Makers and Stock Analysts in Emerging Markets The Effects of Market Makers and Stock Analysts in Emerging Markets.
- Authors
Čekauskas, Karolis; Gerasimovs, Reinis; Liatukas, Vytautas; Putniņš, Tālis J.
- Abstract
We exploit a quasi-experiment to examine the effects of market makers and stock analysts in three emerging stock markets. We find substantial differences in the effects across markets, and in contrast to existing literature, the effects of market makers are not always positive. Our results suggest that the structure of market makers' agreements and compensation matters for their effects on market quality. Stock analysts, on balance, have marginally positive effects on liquidity and informational efficiency. The benefits of market makers are weaker in the presence of stock analysts, and vice versa, suggesting that market makers and stock analysts are more like substitutes than complements in their effects on market quality.
- Subjects
MARKET makers; SECURITIES analysts; EMERGING markets; STOCK exchanges; CONTRACTS; LIQUIDITY (Economics)
- Publication
International Review of Finance, 2012, Vol 12, Issue 3, p305
- ISSN
1369-412X
- Publication type
Article
- DOI
10.1111/j.1468-2443.2011.01140.x