Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/258659 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Risk and Financial Management [ISSN:] 1911-8074 [Volume:] 14 [Issue:] 11 [Article No.:] 556 [Publisher:] MDPI [Place:] Basel [Year:] 2021 [Pages:] 1-32
Publisher: 
MDPI, Basel
Abstract: 
This paper reviews the up-to-date theoretical, empirical, and experimental literature related to the trading venue choice in the context of the fragmented equity markets. We provide a brief background on the history of trading fragmentation in the equity market and its determinants. We discuss the direct and indirect impacts of the market fragmentation on market quality in various dimensions, including liquidity, volatility, and price efficiency. Next, we identify possible determinants and channels from theoretical and empirical studies that could explain order routing decisions and present the possible directions for future research. Finally, we discuss the major regulatory reforms in the U.S. equity market on routing venue decisions. This topic is relevant in current times when phenomena such as 'GameStop Frenzy' have drawn significant attention to commission-free trading venues.
Subjects: 
market structure
fragmentation
market quality
trading volume
order routing decision
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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