The determinants of brokerage fees in a competitive environment

Michael J. Aitken*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)

Abstract

A Trade Practices Commission ruling, which came into effect on 1 April 1984, prohibited the Australian Associated Stock Exchanges (now known as the Australian Stock Exchange) from fixing brokerage fees. The expected consequence was a move to competitive pricing. Specifically, it was expected that brokerage fees would more accurately reflect the costs of providing brokerage services. This study analyses the evolution of the pricing mechanism since deregulation. In particular, it tests the influence of factors such as order size, broker quality, broker size, inventory costs, search costs, broker specialisation and broker learning on brokerage fees.

Original languageEnglish
Pages (from-to)51-68
Number of pages18
JournalAccounting & Finance
Volume31
Issue number1
DOIs
Publication statusPublished - 1991
Externally publishedYes

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