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Title: Wall Street : revisiting its path to dominance before the Civil War
Author: Li, Kwan Leung
Awarding Body: Oxford University
Current Institution: University of Oxford
Date of Award: 2011
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Abstract:
This dissertation analyzes nineteenth-century securities market concentration in New York using newly collected data on trading volumes, bid-ask spreads, dividends and par values. The results show that New York developed larger securities markets based on its commercial primacy after 1817, but larger trading sizes have not translated into advantages that could sufficiently allow New York to gain market share when the telegraph began. Particularly, New York was compared favorably in terms of variety only to markets in the South, Boston and Philadelphia also offered similarly broad range of choices. Dividend yields were also on average higher for stocks listed in New York, but the gaps disappeared once sectors were taken into account. Major stocks traded were still highly localized firms, preventing entry of foreign market-makers due to vulnerability to asymmetric information problems. Larger trading sizes in Wall Street did not translate into lower transaction costs. Using sector, volatility and price-to-par ratio as criteria to match stocks between markets, it is concluded that the differences in the bid-ask spread between New York and other markets were small and mostly statistically insignificant. Trading in Wall Street concentrated only on a few "fancy stocks," with its liquidity advantages not permeating through the market. The absence of general liquidity advantages could probably be explained by an immature call loan market. Balance sheet information and "time bargains" records suggest that banks were still reluctant to grant call loans because stocks actively traded were highly speculative. It is concluded that the advantages of Wall Street before the Civil War were not sufficient to generate concentration momentum.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.550795  DOI: Not available
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