Combining data on high frequency trading (HFT) activities of a randomly selected sample of 120 stocks and data on institutional trades, I find that HFT increases the trading costs of traditional institutional investors. One standard deviation increase in the intensity of HFT activities increases institutional execution shortfall costs by a third. Further analysis suggests that HFT represents as...

The adoption of emissions trading scheme (ETS) and renewable energy sources (RES) policies have been essential to achieving China’s national targets for reducing CO2 emissions and developing non-fossil energy sources. The combination of ETS and RES policies raises an important issue: What is the effect of combining ETS and RES policies on the existing carbon market and economy? Focusing on the ...

Contrary to the general trend of only a few actual trades occurring within point-nonpoint source water quality trading programs in the United States, two trading projects in the Minnesota River Basin, created under the provisions of National Pollutant Discharge Elimination System (NPDES) permits, have generated five major trades and numerous smaller ones. In this paper, these two projects are d...

Concerns have been raised, especially since the global financial crisis, about whether trading in credit default swaps (CDS) increases the credit risk of the reference entities. This study examines this issue by quantifying the impact of CDS trading on the credit risk of firms. We use a unique, comprehensive sample covering 901 CDS introductions on North American corporate issuers between June ...

We explore the connection between the country-level financial disclosure environment and innovative investment. There is strong evidence a more transparent disclosure environment lowers the cost and increases the availability of external equity finance, which should, in turn, impact the real activities most dependent on such financing. Using a variety of proxies for disclosure and transparency ...

People are capable, at will, of trading speed for accuracy when performing a task; they can focus on performing accurately at the cost of being slow, or emphasize speed at the cost of decreased accuracy. Here, we used functional magnetic resonance imaging to investigate the neural correlates of this ability. We show increased baseline activity during speed emphasis in a network of areas related...

We model the distribution of daily stock trading volume using the power law and document a new phenomenon. The power law exponent systematically increases with time suggesting that trading is becoming increasingly concentrated in a subset of stocks. © 2007 Elsevier B.V. All rights reserved.

This paper examines the link between capital market governance (CMG) and several key measures of market performance. Using detailed data from individual stock exchanges, we develop a composite CMG index that captures three dimensions of security laws: the degree of earnings opacity, the enforcement of insider laws, and the effect of removing short-selling restrictions. We find that improvements...