Do the Italian Stars' Shine in a Hybrid Market?

F. PALMUCCI (2005). The Liquidity of a Hybrid Stock Exchange: the Italian case of STAR. ZAGREB INTERNATIONAL REVIEW OF ECONOMICS AND BUSINESS, vol. 8 (1), p. 11-33, ISSN: 1331-5609.

29 Pages Posted: 21 Sep 2004 Last revised: 29 Jan 2013

See all articles by Fabrizio Palmucci

Fabrizio Palmucci

University of Bologna, Department of Management

Date Written: November 1, 2005

Abstract

The market microstructure literature focused particularly, in the last few years, on hybrid market structures, and actual markets offer some major examples of this kind like NYSE or the London Stock Exchange (the SET segment).

This paper provides unique additional evidence represented by the Italian STAR market, a segment that in 2001 experienced the introduction of the specialist, transforming an order driven market in a hybrid one, and an increase in the transparency level.

The empirical evidence shows that the STAR stocks experienced an improvement in liquidity (measured by trading volumes and spreads) and in the price discovery process, and to some extent it is possible to argue that these improvements are mainly due to the Specialist's activity.

Keywords: Financial markets, market microstructure, hybrid markets, specialist, market making

JEL Classification: G14, G15, G18

Suggested Citation

Palmucci, Fabrizio, Do the Italian Stars' Shine in a Hybrid Market? (November 1, 2005). F. PALMUCCI (2005). The Liquidity of a Hybrid Stock Exchange: the Italian case of STAR. ZAGREB INTERNATIONAL REVIEW OF ECONOMICS AND BUSINESS, vol. 8 (1), p. 11-33, ISSN: 1331-5609., Available at SSRN: https://ssrn.com/abstract=561781 or http://dx.doi.org/10.2139/ssrn.561781

Fabrizio Palmucci (Contact Author)

University of Bologna, Department of Management ( email )

Via Capo di Lucca, 34
Bologna, Bologna 40126
Italy
+39051246411 (Fax)

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