Underwriterss Allocation Power and Adverse Selection Costs in the IPO Process

2014 ◽  
Author(s):  
Khelifa Mazouz ◽  
Brahim Saadouni ◽  
Shuxing Yin
Keyword(s):  
Adverse Selection ◽  
Adverse Selection Costs

scholarly journals How does corporate voluntary disclosure affect asymmetric information and adverse selection?

2015 ◽  
Vol 12 (2) ◽  
pp. 413-425 ◽  
Author(s):  
Amal Hamrouni ◽  
Anthony Miloudi ◽  
Ramzi Benkraiem
Keyword(s):  
Asymmetric Information ◽  
Adverse Selection ◽  
Voluntary Disclosure ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Annual Reports ◽  
Strategic Information ◽  
Information Measures ◽  
Adverse Selection Costs ◽  
Bid Ask Spreads

This paper investigates whether the extent of corporate voluntary disclosure mitigates asymmetric information and adverse selection in the Euronext Paris stock exchange. We apply a disclosure index as a proxy for the extent of voluntary disclosure and use different spread measures to estimate both asymmetric information and adverse selection. Our findings show a negative relationship between the disclosure index and asymmetric information and adverse selection proxies. An analysis of sub-indexes provides additional mixed results. Several asymmetric information measures are negatively related to the volume of financial, non-financial and voluntary governance information in corporate annual reports. Nevertheless, the effect of strategic information volume is statistically significant only for effective bid-ask spreads. On the whole, these results are consistent with the view that high corporate voluntary disclosure is associated with narrow spreads and low adverse selection costs

THE IMPACT OF MARKET MAKER CONCENTRATION ON ADVERSE-SELECTION COSTS FOR NASDAQ STOCKS

2005 ◽  
Vol 28 (3) ◽  
pp. 461-485 ◽  
Author(s):  
Bonnie F. Van Ness ◽  
Robert A. Van Ness ◽  
Richard S. Warr
Keyword(s):  
Adverse Selection ◽  
Market Maker ◽  
Adverse Selection Costs ◽  
The Impact

Adverse-Selection Costs and the Probability of Information-Based Trading

2003 ◽  
Vol 38 (2) ◽  
pp. 257-272 ◽  
Author(s):  
Kee H. Chung ◽  
Mingsheng Li
Keyword(s):  
Adverse Selection ◽  
Adverse Selection Costs

scholarly journals Is Trading Fast Dangerous?

2018 ◽  
pp. 9-27 ◽  
Author(s):  
Thierry Foucault ◽  
Sophie Moinas
Keyword(s):  
Financial Markets ◽  
Adverse Selection ◽  
Policy Making ◽  
Information Technologies ◽  
Empirical Literature ◽  
Market Quality ◽  
Gains From Trade ◽  
Adverse Selection Costs

This chapter discusses the findings of the growing theoretical and empirical literature on trading speed in financial markets. The speed of trading has increased significantly in recent years, due to progress in information technologies and automation of the trading process. This evolution raises many questions about the effects of trading speed. It is argued that an increase in trading speed raises adverse selection costs but increases competition among liquidity providers and the rate at which gains from trade are realized. Thus, the effect of an increase in trading speed on market quality and welfare is inherently ambiguous. This observation is important for assessing empirical findings regarding the effects of trading speed and policy-making.

scholarly journals PENGARUH KEPEMILIKAN INSTITUSIONAL TERHADAP KARAKTERISTIK PASAR SAHAM DI BURSA EFEK INDONESIA

2017 ◽  
pp. 1-12
Author(s):  
Donalson Silalahi
Keyword(s):  
Standard Deviation ◽  
Stock Market ◽  
Adverse Selection ◽  
Stock Price ◽  
Trading Volume ◽  
Stock Exchange ◽  
Control Variable ◽  
Institutional Ownership ◽  
Adverse Selection Costs ◽  
The Relationship

The role of institutional ownership in the financial markets became very important. However, until today there is no consensus among researchers about the influence of institutional ownership on the characteristic of stock market. Therefore, researchers are motivated to conduct further research the influence of institutional ownership on the characteristic of stock market. The research conducted at the Indonesian Stock Exchange with traded spread and adverse selection costs as dependent variable and institutional ownership as independent variable. In addition to institutional ownership, also used standard deviation of common stock price and trading volume as a control variable to clarify the relationship of institutional ownership on the characteristic of stock market. The study was conducted on 120 firms with observations in the period 2010-2011. All the required data obtained from the Indonesian Capital Market Directory. The results showed that: First, institutional ownership has a negative and significant effect on traded spread. Second, the variability of traded spread is able to be explained by the variability of institutional ownership, standard deviation of the stock price, and trading volume 24.8 percent. Third, institutional ownership has a negative and significant effect on adverse selection costs. Fourth, the variability of adverse selection costs is able to be explained by the variability of institutional ownership, standard deviation of the stock price, and trading volume 26.2 percent. Fifth, the relationship between institutional ownership to traded spread and adverse selection cost before and after entering the control variables remain negative and significant.

scholarly journals Evidence on board size and information asymmetry: A capital markets perspective

2007 ◽  
Vol 4 (2) ◽  
pp. 248-256 ◽  
Author(s):  
Susan Flaherty ◽  
Joanne Li ◽  
Kenneth Small
Keyword(s):  
Information Asymmetry ◽  
Adverse Selection ◽  
Equity Market ◽  
Market Liquidity ◽  
Board Members ◽  
Direct Relation ◽  
Board Size ◽  
Bid Ask Spread ◽  
Adverse Selection Costs ◽  
Bid Ask Spreads

We examine the relation of board size with market liquidity and adverse selection costs using a sample of Fortune 200 companies. After controlling for firm specifics, equity characteristics, and ratio of insiders, we find a direct relation between board size and equity market liquidity. Our findings indicate that board size is positively and significantly related to dollar depth but has no impact on bid-ask spreads. Furthermore, using the adverse selection component of the bid-ask spread as a proxy for transparency, we find that larger boards reduce information asymmetries, but the ratio of insiders to total board members has no impact on informational asymmetries

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