Work

Tick Sizes, Stock Prices, and Share Turnover: International Evidence

Year: 2002

Type: preprint

Abstract: We examine tick sizes, stock prices, and share turnover rates in stock markets across 18 developed countries and find that (i) differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and (ii) lower percentage tick sizes are not associated with higher turnover. We consider the implications of these findings for the recent decimalization of stock trading in the United States, and conclude that decimal trading is likely to result in lower stock prices (due to stock splits) with no substantial change in dollar trading volume.

Source: SSRN Electronic Journal

Authors: Larry R. Gorman, Edward A. Dyl, H. Douglas Witte

Institutions: California Polytechnic State University, University of Arizona, University of Missouri

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3121663253

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