Skip Navigation



RFS Advance Access published online on July 1, 2006
Review of Financial Studies, doi:10.1093/rfs/hhl020
This Article
Right arrow Full Text (Accepted Manuscript)
Right arrow All Versions of this Article:
20/2/235    most recent
hhl020v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Goldstein, M. A.
Right arrow Articles by Sirri, E. R.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2006. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Article

Transparency and Liquidity:A Controlled Experiment on Corporate Bonds

Michael A. Goldstein 1 *, Edith S. Hotchkiss 2, and Erik R. Sirri 3
1 Babson College 223 Tomasso Hall Babson Park, MA
2 Boston College Fulton Hall, Room 340 Chestnut Hill, MA
3 Babson College 328 Tomasso Hall Babson Park, MA

* To whom correspondence should be addressed.
Michael A. Goldstein, E-mail: goldstein{at}babson.edu


  Abstract

This paper reports the results of an experiment designed to assess the impact of last-sale trade reporting on the liquidity of BBB corporate bonds. Overall, adding transparency has either a neutral or positive effect on liquidity. Increased transparency is not associated with greater trading volume. Except for very large trades, spreads on newly-transparent bonds decline relative to bonds that experience no transparency change. However, we find no effect on spreads for very infrequently traded bonds. The observed decrease in transactions costs is consistent with investors’ ability to negotiate better terms of trade once they have access to broader bond pricing data.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.