The Impact of Market Maker Competition on Price Efficiency Features in the Tunisian stock Market
https://doi.org/10.26794/2587-5671-2023-27-5-104-114
Abstract
The purpose of this study — is to determine the relationship between market maker competition and stock price efficiency in TSE (Tunisian Stock Exchange) market. The proxy for competition was determined as the number of market makers and the parameters investigated were transaction costs, information asymmetry and profit. The high positive correlation between competition and stock price efficiency is demonstrated by the negative impact of competition on all the variables studied. In addition, the price efficiency increased considerably after the introduction of new market makers by using the difference-in-difference (DID) model. Also, the competition between market makers has a significant negative impact on price efficiency through transaction costs, asymmetry information and level of experience. Thus, it can be concluded that the stock price efficiency can be improved by increasing the competition of market makers in Tunisia.
About the Author
F. Hachicha
University of Sfax
Tunisia
Competing Interests:
Tunisia
Fatma Hachicha — Assoc. Prof., Department of Finance, Institute of High Business Studies of Sfax
Sfax
Competing Interests:
The author has no conflicts of interest to declare.
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For citations:
Hachicha F. The Impact of Market Maker Competition on Price Efficiency Features in the Tunisian stock Market. Finance: Theory and Practice. 2023;27(5):104-114. https://doi.org/10.26794/2587-5671-2023-27-5-104-114
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