@article{222572ff99934d449d24c0fce1234464,
title = "Does the bid–ask spread affect trading in exchange operated dark pools? Evidence from a natural experiment",
abstract = "We exploit exogenous reductions in the minimum tick size to examine the effect of the bid–ask spread in the lit market on dark trading activity in the exchange operated dark pool in Japan. Stocks affected by the minimum tick size experience a decline in the share of trading in the exchange operated dark pool. The decrease in the share of dark trading is mostly evident among stocks with a constrained tick size prior to the tick size changes. Overall, our findings imply that reducing the minimum tick size can help lit venues regain market shares over dark venues.",
keywords = "Bid–ask spread, Dark trading, Exchange operated dark pool, Japanese market, Tick size change",
author = "Duong, {Huu Nhan} and Kalev, {Petko S.} and Tian, {Xiao Jason}",
note = "Funding Information: The authors would like to thank the anonymous referees, and seminar and conference participants at the 2019 Financial Markets and Corporate Governance (FMCG) conference, La Trobe University for helpful comments and suggestions. Special thanks to colleagues at the Department of Treasury and Finance, in particular, Cheng Yang and Bonnie Li for constructive advice. We are grateful to the Securities Industry Research Centre of Asia-Pacific (SIRCA) for providing the data used in our study. The views expressed are those of the authors and do not necessarily reflect the views of the Victorian Department of Treasury and Finance. All remaining errors are our own. Publisher Copyright: {\textcopyright} 2022",
year = "2022",
month = jun,
doi = "10.1016/j.jedc.2022.104436",
language = "English",
volume = "139",
journal = "Journal of Economic Dynamics and Control",
issn = "0165-1889",
publisher = "Elsevier",
}