Journal of Financial Services Research

, Volume 22, Issue 1–2, pp 125–139 | Cite as

Electronic Communication Networks and Liquidity on the Nasdaq

  • James P. Weston

Abstract

This paper examines the growth of electronic communication networks (ECNs) and their impact on the liquidity of Nasdaq stocks. I find that the recent growth of trading through ECNs has resulted in tighter bid-ask spreads, greater depths, and less concentrated markets. Overall, our results support the hypothesis that electronic communication networks have improved Nasdaq liquidity.

Bid-ask spread liquidity ECN Nasdaq. 

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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • James P. Weston
    • 1
  1. 1.Jones Graduate School of ManagementRice UniversityHoustonU.S.A

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