Law Commons^™

Competition Among Securities Markets: A Path Dependent Perspective, John C. Coffee Jr.

Faculty Scholarship

Today, there are an estimated 150 securities exchanges trading stocks around the world. Tomorrow (or at least within the reasonably foreseeable future), this number is likely to shrink radically. The two great forces reshaping the contemporary world – globalization and technology – impact the world of securities markets in a similar and mutually reinforcing fashion:

1. they force local and regional markets into more direct competition with distant international markets;
2. they increase overall market capitalization and lower the cost of equity capital, as issuers are enabled to access multiple markets; and
3. they permit order flow and liquidity to migrate quickly from …