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Article
Publication date: 1 February 2002

EDWARD A. DYL, H. DOUGLAS WITTE and LARRY R. GORMAN

We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a…

Abstract

We examine tick sizes, stock prices, and share turnover in eighteen stock markets in developed countries and find that differences in mandatory tick sizes explain a significant proportion of the variation in stock prices among markets, and that lower percentage tick sizes are not associated with higher turnover. We consider the implications of these findings for the recent decimalization of stock trading in the United States, and conclude that decimal trading is likely to result in lower stock prices (due to stock splits) with no substantial change in dollar trading volume.

Details

Studies in Economics and Finance, vol. 20 no. 2
Type: Research Article
ISSN: 1086-7376

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