A Study of the NYSE-Euronext Merger Open Access

Abstract

Access to stock markets greatly affects a company's ability to grow and be productive in any
market place. Until recently, however, stock exchanges were not analyzed as firms competing
and producing goods in their own market. The budding discussion became even more
complicated as exchanges began engaging in mergers, in an attempt to increase profitability. We
conduct an empirical analysis of the effects of one of these mergers on the stocks traded on the
exchanges involved, and the marketplaces in which the exchanges compete. Our results show
that stocks on both exchanges experienced lower liquidity during the time of the merger's
announcement. They also indicate that stocks traded on the New York Stock Exchange (NYSE)
experienced higher liquidity during the time of the merger, whereas stocks traded on Euronext
saw lower liquidity. Moreover, we show that while the market shares of both participating
exchanges increased, the level of market concentration remained relatively stable. Such stability
of market concentration comes from both the statistic's previously high levels and tradeoffs
between the market shares of the dominant exchanges. Our study adds to a growing body of
research regarding transatlantic exchange mergers, which we predict will become increasingly
common in the near future. Ours is one of the first to conduct an empirical analysis of a merger
of this variety. We hope it will contribute to future research and policymaking regarding the
appropriate mechanisms for regulating exchange merger.

Table of Contents

Introduction 1

Background 2

Literature Review 5

Empirical Strategy 10

Results 14

Discussion 21

Conclusion 25

Appendix 28

Bibliography 50

About this Honors Thesis

Rights statement

• Permission granted by the author to include this thesis or dissertation in this repository. All rights reserved by the author. Please contact the author for information regarding the reproduction and use of this thesis or dissertation.

School	Emory College
Department	Economics and Mathematics
Degree	BA
Submission	Honors Thesis
Language	English
Research Field	Economics, General Economics, Finance
Keyword	New York Stock Exchange Stock Exchange Euronext
Committee Chair / Thesis Advisor	Francis, Andrew, Emory University
Committee Members	Garibaldi, Skip, Emory University Wade, Melissa M, Emory University

Last modified

Primary PDF

Thumbnail	Title	Date Uploaded	Actions
	A Study of the NYSE-Euronext Merger ()	2018-08-28 16:29:55 -0400	Press to Select an action Download

Supplemental Files

Thumbnail	Title	Date Uploaded	Actions