TY - JOUR
T1 - How broker ability affects institutional trading costs
AU - Comerton-Forde, Carole
AU - Fernandez, Christian
AU - Frino, Alex
AU - Oetomo, Teddy
PY - 2005/11
Y1 - 2005/11
N2 - The present paper shows that broker research and trade execution ability has a significant impact on the cost of institutional trading. The results reveal that there is significant variation in the ability of brokers to control execution costs. Trades executed by brokers with stronger research ability exhibit a higher permanent price impact, whereas those executed by brokers with better execution ability exhibit a lower temporary price impact. Brokers are also found to specialize on an industry level that gives rise to variation in ability within a brokerage house.
AB - The present paper shows that broker research and trade execution ability has a significant impact on the cost of institutional trading. The results reveal that there is significant variation in the ability of brokers to control execution costs. Trades executed by brokers with stronger research ability exhibit a higher permanent price impact, whereas those executed by brokers with better execution ability exhibit a lower temporary price impact. Brokers are also found to specialize on an industry level that gives rise to variation in ability within a brokerage house.
KW - Broker ability
KW - Institutional trades
KW - Transaction costs
UR - http://www.scopus.com/inward/record.url?scp=29244475338&partnerID=8YFLogxK
U2 - 10.1111/j.1467-629X.2005.00139.x
DO - 10.1111/j.1467-629X.2005.00139.x
M3 - Article
AN - SCOPUS:29244475338
VL - 45
SP - 351
EP - 374
JO - Accounting & Finance
JF - Accounting & Finance
SN - 0810-5391
IS - 3
ER -