Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211899 
Year of Publication: 
2001
Series/Report no.: 
Bank of Finland Discussion Papers No. 21/2001
Publisher: 
Bank of Finland, Helsinki
Abstract: 
This paper provides an explanation of technical inefficiencies of financial exchanges in Europe as well as an empirical analysis of their existence and extent.A single-stage stochastic cost frontier approach is employed, which generates exchange inefficiency scores based on a unique unbalanced panel data set for all major European financial exchanges over the period 1985-1999.Overall cost inefficiency scores reveal that European exchanges operate at 20-25% above the efficiency benchmark.The results also affirm that size of exchange; market concentration and quality; structural reorganisations of exchange governance; diversification in trading service activities; and adoption of automated trading systems significantly influence the efficient provision of trading services in Europe.Over the sample period, European exchanges notably improved their ability to efficiently manage their production and input resources.
Subjects: 
Europe
financial exchanges
panel data
technical efficiency
Persistent Identifier of the first edition: 
ISBN: 
951-686-749-9
Document Type: 
Working Paper

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