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

被引：4
|
作者：
Theissen, Erik [1 ,4 ]
Westheide, Christian [2 ,3 ]
机构：
[1] Univ Mannheim, Business Sch, L 9,1-2, D-68161 Mannheim, Germany
[2] Univ Vienna, Fac Business Econ & Stat, Dept Finance, Oskar Morgenstern Pl 1, A-1090 Vienna, Austria
[3] Leibniz Inst Financial Res SAFE, Theodor W Adorno Pl 3, D-60323 Frankfurt, Germany
[4] Ctr Financial Res, Albertus Magnus Pl, D-50923 Cologne, Germany
来源：
ECONOMICS LETTERS | 2023年 / 224卷
关键词：
Designated market makers; Liquidity;
D O I：
10.1016/j.econlet.2023.110992
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
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 Borse'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.(c) 2023 Elsevier B.V. All rights reserved.
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页数：5
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