Financial transaction tax and market quality: Evidence from France†
MetadataShow full item record
The effectiveness of Financial Transaction Taxes (FTTs) for deterring speculative trading and improving market quality remains controversial. Studying the FTT imposed in 2012 on large-cap stocks traded on the Euronext Paris, we find that stocks subject to the FTT subsequently experience significantly decreased turnover and increased spreads relative to the untaxed peers. Further tests suggest that the FTT imposition induces investors to migrate their trades and results in less informativeness in the taxed stocks. Collectively our findings support the view that FTTs deter informed trades and reduce market quality.
Showing items related by title, author, creator and subject.
Kabir, Mohammad Mahfuz (2009)The wave of globalisation gave rise to a number of regional arrangements. The notion of economic regionalism gained importance rapidly in international trade as well as regional diplomacy. The body of theoretical and ...
Philip, Abey; Alapppatt, M. (2015)This paper investigates the importance of relevant macro variables of trade between ASEAN countries and India. It is also important to analyse the significance of different bilateral agreements and its impact on Indian ...
Gurrib, Muhammad Ikhlaas (2008)This study gives an insight into the behaviour and performance of large speculators and large hedgers in 29 US futures markets. Using a trading determinant model and priced risk factors such as net positions and sentiment ...